The factors that influence the location of ‘Food Processing’ Industries are:

Market

• The Agri-food industry, because it provides the market information to assess an agri-food plant’s viability.
• Since agri-food plants enter existing markets, it is essential that firms know the market conditions.
• Thus, firms analyze the market structure, consumer behaviour and the basis of competition within where the plant is located.
• Proximity to markets, distribution centres and availability/cost of truck and rail services seem to be more critical to the location of small plants than to the location of larger ones.

Infrastructure

• The basic infra structural aspects such as water, electricity, existing food processing facilities etc. In location of a food plant becomes important.
• The firms also assess the transport infrastructure, including roads, availability and cost of truck and rail services and storage terminals.
• In addition, the firm should also consider the social infrastructure including housing, schools and health and recreational facilities because these components may affect the plant’s ability to recruit the necessary personnel.

Agricultural raw material

• For a food processing Industry, a well-organized procurement system is necessary to supply enough raw material with acceptable quality at the appropriate time and at a reasonable cost.
• Example: Availability of raw agricultural supply is most critical for milk and seafood processing plants.

Labour

• Since these industries seldom directly employ many workers, they usually are not sensitive to the supply of unskilled labour.
• In general, skilled labour and managerial talent is more difficult to find, a constraint especially acute if the plant is in a rural area.

Environmental factors

• In this category, existence to handle water and solid waste was the most frequently  cited factor as being very important for the location decisions.
• This is due to the environmental regulations and permits in place.

• The Combination of above elements have resulted in more dominant localisation of Agro-based Industries in North-West India because of following factors:
  • Climatic factors
    • The climate in North-western India is suitable for preserving food based products for a longer duration due to its cooler climates.
    • Other parts of country including peninsular and eastern India are more humid and is not suitable for longevity.
  • Economic factors
    • Availability of raw product
      • For an industry to succeed, the raw materials should be easily available at a lower cost. The North-western part is suitable in this regard due to its primarily farm based economy.
    • Readily available market
      • Large markets are available nearby for selling the manufactured products in this region due to higher population concentration.
      • This reduces the cost of transportation as well as create for profits for the owners in a short duration.
    • Cheap labour
      • Cheaper labour force reduces operating costs of such industries quite drastically. As there is easy availability of such human resource, this region has concentration of agro industries.
  • Geographic factors
    • Connectivity
      • The region is marked with better connectivity to all major places nearby. The transportation can be conducted through both road and rail and hence is easy for marketing products as well as movement of raw materials.

Locational Factors Influencing Food Processing Industries,Locational Factors Influencing Food Processing Industries

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