Tuesday, July 26, 2011


One distinguishing difference between rich and poor countries is the power of modern technology the former have which deploys energy intensive, largely automated machinery and high productivity techniques making human intervention redundant. Modern industrial economic principles call for high production volumes which brings down the cost of production and increase profitability. In contrast most developing countries, having abundant man power and large unemployment rate depend heavily on large number of small scale operators for industrial production. Dynamics of economic growth can uplift the economies of many developing countries as witnessed in China, India, Brazil, Malaysia etc and availability of manpower becomes more and more difficult. In this context is it possible for them to continue with small and micro-enterprises based economy? Do they have any option other than going in for large sized manufacturing operations involving mechanized processes and equipment and reduce human deployment to the minimum?

In a country like India many food processing operations evolved over the years and after the British era, the independent republic was left with a huge problem to provide employment to millions of people, not engaged in agriculture. Traditionally most food processing was done manually with very little use of machinery. A classical example is the grinding of grains into flours which is done even to day by stone mills or steel plate mills, the processing capacity not exceeding a few kilograms an hour. Advent of Roller Flour Mills with capacities ranging from 30 tons to 1000 tons a day did not change the landscape much since refined flours from grains like wheat have little culinary relevance. Same held good for all food processing sectors like fruit and vegetables, oil seeds, milk, poultry, meat and packed foods. Transformation from a predominantly manual mode of food processing to large scale mechanized mode has been very slow, though clearly perceptible.

The scenario started changing only when manpower availability became critical and the cost became exorbitant. Employment exchange centers where unemployed people are supposed to enroll are not able to provide required man power to the industry, forcing them to look for more and more mechanization. The trend towards increased mechanization became more perceptible after the economic liberalization process which started in early nineteen nineties and to day entrepreneurs can access the best machinery from across the world with minimum hassle. The days of Khadi and Village Industries Commission set up during the early years of independence to encourage and support micro-enterprises has largely become dysfunctional with practically no support from the government. Though there is much talk about unemployment in the country, the ground reality is that industry finds it hard to get unskilled personnel in required numbers at reasonable wages for employment. With many government employment schemes operating and paying high wages, the trend is for people to gravitate towards these schemes leaving the industry high and dry. What option does the industry have except going in for mechanized gadgets and implements for managing production?

What are the long term repercussions of such a change on the economic front of the country? There was a time when India had the cheapest labor and it was a strength on which exports were built. In the food area there are many operations that cannot be done using machines without compromising on their eating characteristics though continuous R & D may come up with more efficient equipment in response to emerging demand for such mechanical contraptions. Products like Papad, Roti, Chikki, most fried snack foods, traditional sweet meats, require deployment of artisans familiar with the unit operations involved and it is difficult to imagine that satisfactory machines will ever be evolved. If this is so how about using this situation to the advantage of the country? For this to happen the redundant and wasteful Government schemes must be replaced with imaginative productive schemes linked to industrial needs. In stead of distributing doles to people with no long term benefit, such funds must be channeled to industrial workers like artisans and unskilled labor force in cooperation with the industry.

If GOI can evolve a policy of encouraging these artisan based industries through a "special purpose vehicle" (SPV) with high priority to enable them to manufacture safe and high quality products with minimum use of power driven machinery, there will never be a challenge to the supremacy of the country from any quarters in the foreseeable future. India should learn a lesson from the experience in the cashew nut processing which was earlier a predominantly labor intensive operation, now being done with machinery. With individual skill for getting high quality nuts being marginalized, there are countries like China, Vietnam and those from some Africa which are challenging the Indian supremacy in this coveted area. What India needs is a series of functional industrial estates across the country that will specialize in some or the other food areas and if adequate technical and financial muscle is provided there is no reason why India cannot dominate the global food market with its enormous 'human muscle" and no other country on earth can pose any challenge in the foreseeable future. Where there is a vision and a will, there must be a way to accomplish the objective.

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