This study endeavours to understand the enterprise challenges specifically faced by small scale agro-food processing firms. The supported data will be collected from fruits and vegetable processing firms registered with Pune District Industries Centre (DIC).
International Journal of Management (IJM) Volume 11, Issue 3, March 2020, pp 186–192, Article ID: IJM_11_03_020 Available online at http://www.iaeme.com/ijm/issues.asp?JType=IJM&VType=11&IType=3 Journal Impact Factor (2020): 10.1471 (Calculated by GISI) www.jifactor.com ISSN Print: 0976-6502 and ISSN Online: 0976-6510 © IAEME Publication Scopus Indexed A STUDY TO UNDERSTAND THE ENTERPRISE CHALLENGES IN SMALL SCALE AGRO-FOOD PROCESSING FIRMS Dr Vimal Deep Saxena Assistant Professor, Sinhgad Business School, Pune, India Dr Rohini Suresh Sawalkar Assistant Professor, MIT-WPU University, Pune, India ABSTRACT Agro food processing sector has drawn a great attention in the recent past One side it is helping to Increase shelf-life of agro food products and other side it is creating the space to meet the demand of current dynamic market Changing life style, Increasing nuclear family culture and less availability of time to cook food, has emerged as a big opportunity to food processing industry in India with almost 70 % contribution to its retail sector Increasing demand for food processing products has given a rise to the number of firms operating in the sector however; many small firms find it difficult to survive for longer term Due to lack of expertise, exposure and resources, small firms face many challenges in their way This study endeavours to understand the enterprise challenges specifically faced by small scale agro-food processing firms The supported data will be collected from fruits and vegetable processing firms registered with Pune District Industries Centre (DIC) Descriptive research methodology will be used and hypothesis will be tested through collected data with the help of T-test statistical tool to draw the conclusion Keywords: Food processing, Enterprise challenges, Small scale firms Cite this Article: Dr Vimal Deep Saxena and Dr Rohini Suresh Sawalkar, A Study to Understand the Enterprise Challenges in Small Scale Agro-Food Processing Firms, International Journal of Management (IJM), 11 (3), 2020, pp 186–192 http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=11&IType=3 INTRODUCTION Agro food processing has poised for huge growth by increasing contribution every year in the world food trade and emerged as a high value sector with about 32 % of total country’s food market Change in consumer preference and food habits are giving a boost to the industry however, customers are less emotional to food brands and they want best and this issue is very serious for small scale enterprises (Lahidji Rez) The size of agro food processing in Indian is currently valued at US $ 1.3 billion and is growing at a Compound Annual Growth http://www.iaeme.com/IJM/index.asp 186 editor@iaeme.com Dr Vimal Deep Saxena and Dr Rohini Suresh Sawalkar Rate (CAGR) of 20 % wherein the all-time demanding organic food market is likely to grow by three times by 2020 Contribution in India’s total export and total industrial output is considerable by thirteen percent and sex percent respectively India is a rich in agriculture resources and rank first in world in 2013 for the production of Arecanut, Bananas, Castor oil seed, Chick peas, Chillies & Peppers dry, Ginger, Lemons & limes, Mangoes, Mangosteens, guavas, Millet, Okra, Papayas, Pigeon peas, Meat- buffalo, Milk-whole fresh buffalo & goat, Ghee, butter oil of cow milk, Ghee of buffalo milk, sesame seed Further, India has been also a one of the world leaders in production of Anise, cauliflower, broccoli, cabbages, egg plants, pumpkins, sugarcane, garlic, milk, sugar, cashew nuts, cardamoms etc and contributing a lot to raise total economy According to the latest figures of Make in India campaign website, India has 194.39 Million hectares of gross cropped area by 2012-13 In same year the total net irrigated area is 66.10 Million Hectares India has total 137 agro-climactic zones with around 42 mega Food Park with an investment of approximate INR 155 Billion The availability of fertile lands and resources make India rich in terms of adequacy of raw products for food processing The new manufacturing policy 2011 confirmed food processing as a priority sector in India and government set up a special fund called "Food Processing Fund" of approximately $ 300 million (at Rs 67.25 to USD) in NABARD for extending affordable credit to designated food parks and the individual food processing units in the designated food parks Reserve Bank of India has classified loan to food & agro-based processing units and Cold Chain under agriculture activities for Priority Sector Lending (PSL) subject to aggregate sanctioned limit of INR 100 Crore per borrower from the banking system In this series of promoting agro food processing industries, Indian government has also allowed 100 % Foreign Direct Investment under the automatic route and through approval route for trading and e-commerce Processing of food goes through many processes and requires strong technological This term food industries cover a series and number of industrial activities directed at the processing, conversion, preparation, preservation and packaging of foodstuffs It starts from the identification and collection of raw material to the finished processed goods The classification of industrial food processing is important to distinguish relevant different types of processing to prevent and control obesity and related chronic non-communicable diseases, and also malnutrition (Jean-Claude Moubarac et.al,) The inconsistent and insufficient supply of raw materials produced by agriculture, farming, breeding and fishing, Seasonality of crops, lack of training to personnel, hygiene and sanitation practices, poor market development (Dr Ian Lambert), poses challenges in agro food processing As the industry is very big, so for better understanding, it can be broadly classified into Food sector and Non-food sector The non-food agro sector includes the processing of raw material resultant from agriculture, livestock and forestry into the category of non-edible products Some of the examples are as extracting paper from trees, leather products, jute, cotton and silk etc The food sector includes the processing of raw material from agriculture, livestock and fisheries to the edible from The processing of foods actually transforms raw ingredients and basically involves activities such as mincing and macerating, liquefaction, emulsification, and cooking (such as boiling, broiling, frying, or grilling); pickling, pasteurization, along with other preservation techniques; and other packaging The food sector is categorized into sub categories namely; fruits and vegetable, dairy, meat & poultry, marine products, grain processing, consumer food This study is done considering only Fruits and vegetable processing firms; processing different products such as Beverages, juices, concentrates, pulps, slices, frozen & dehydrated products, potato wafers/chips etc The processing of fruits and vegetable is studied with http://www.iaeme.com/IJM/index.asp 187 editor@iaeme.com A Study to Understand the Enterprise Challenges in Small Scale Agro-Food Processing Firms reference to the small scale enterprises Small scale enterprises in India defined by MSMED Act 2006, Having More than Rs.25.00 lakhs but does not exceed Rs.500.00 lakhs in plant and machinery in case manufacturing organization and having More than Rs.10.00 lakhs but does not exceed Rs.200.00 lakhs in case of service organization Small scale firms are well spread across the country and contributing a lot in terms of creating employment and growth of food processing However, due to lack of expertise, exposure and resources, small firms face many challenges in their way Though the food processing industry is undergoing a massive economic, social and political changes but some of the major threats is climate change and global competition (Seena Shah and Issam A Ghazzawi) For small enterprises some of the major impediments in the growth are poor management, scarcity of packaging materials; high transport cost, inadequate technology, unfair competition and lack of market and product research are the major constraints creating obstacles in the progress of industry (K.K Barman and Namita Devi) However, due to rough handling, lack of cold storages and improper handling by intermediaries, it was estimated that about 50 per cent of fruits and vegetable production went waste in the world (G G Joshi, D S Nawadkar, B K Mali, and H R Shinde) Some of the other enterprises challenges understood through extensive literature review are recorded as Availability of resources, Allocation of resources, Allocation of work, Employee skills, Employee turnover, Improper planning, Improper coordination, Improper organization structure, Rapidly changing technology, Lack of managerial knowledge and experience etc These factors have been treated as variables to collect information from sample firms in geographical research area OBJECTIVES To get brief understanding about small scale agro food processing firms To understand the enterprise challenges faced by small scale agro food processing firms RESEARCH METHODOLOGY The research is descriptive type of research, and researcher used survey method to aims at studying the enterprise challenges faced by small scale fruits and vegetable firms in Pune district For the research, researcher collected data by conducting survey with structured questionnaire from the selected small scale fruits and vegetable firms in Pune district Both Primary and secondary data collected for the study Microsoft Excel 2007 and SPSS software used for recording the data and T-test is used for analysis 3.1 Sample Size The data for sample units was directly collected from Pune DIC From the overall collected data from DIC total 93 firms were fitting to the criteria Total available population for the subject found to be 93 Considering the number, researcher decided to go for convenience sampling method and considered all of them for data collection However, researcher received data from 68 responses to analyze the data The sample size for conducting this research was limited to the small scale firms registered with Pune District Industries Center (DIC) from 2007-08 to 2014-15 The firms were contacted In-person with a structured questionnaire The data was collected from the person In-charge in the firm While collecting data many other aspects were also discussed and observed in the firm as the data collection mode was a sort of interview method http://www.iaeme.com/IJM/index.asp 188 editor@iaeme.com Dr Vimal Deep Saxena and Dr Rohini Suresh Sawalkar DATA ANALYSIS Table Response matrix for different variables S No Comparison and Impact of different enterprise challenges Availability of resources Allocation of resources Allocation of work Employee skills Employee Turnover Improper planning Improper coordination Improper organisation structure Rapidly changing technology Lack of managerial knowledge and experience 10 Total responses out of 68 respondents 27 33 32 23 28 28 31 26 31 27 As per the data collected from respondents (Shown in Table No 1) major three enterprise related challenges are Allocation of resources (48.52%) followed by Allocation of work (47.05%), and followed by rapidly change in technology and Improper coordination (45.58%) The research findings also grab the attention towards the technological advancement of enterprises wherein only 39.71% of firm is upgraded Increasing number of nuclear family in the area and reduction in joint family status in the research areas has given a different angle to study the topic As the nuclear families are increasing so the double income status is also increasing; means husband and wife both are working and getting income They are getting income but they don’t find much time to cook the food so the dependency of these families is increasing on processed foods hence the demand for processed food All size of firms are operating in the sector to meet the demand, however, small scale enterprises are huge in number but finding it difficult to sustain due to many challenges Enterprise challenges are some of those challenges which need a direct attention for the growth of enterprises The recorded responses in the table are depicts the information about the different kinds of challenges faced by the respondent firms in Pune district Above table shows the responses given by the respondents freely on their understanding about the factors which are more challenging as far as enterprises challenges are concerned Some of the respondents found more than one challenging factors so marks accordingly 4.1 Hypotheses Testing H0 #: Fruits and vegetable firms under small scale agro food processing industry in Pune district are not facing enterprise challenges Table Reliability statistics Hypothesis (Source: Analysis through SPSS) Cronbach’s Alpha Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items 947 947 10 http://www.iaeme.com/IJM/index.asp 189 editor@iaeme.com A Study to Understand the Enterprise Challenges in Small Scale Agro-Food Processing Firms Table One sample test (T-Test) Hypothesis (Source: Analysis through SPSS) One-Sample T-Test VAR0011 VAR0022 VAR0032 VAR0042 VAR0052 VAR0062 VAR0072 VAR0082 VAR0092 VAR0102 t 4.426 5.293 4.787 4.540 4.516 5.169 4.208 3.733 4.946 4.651 df 67 67 67 67 67 67 67 67 67 67 Test Value = 3.5 95% Confidence Interval of the Sig (2Mean LowerDifference Upper tailed) Difference 000 54412 2987 7895 000 66176 4122 9113 000 60294 3515 8543 000 52941 2967 7621 000 55882 3118 8058 000 61765 3791 8562 000 57353 3015 8456 000 48529 2258 7448 000 61765 3684 8669 000 55882 3190 7986 DISCUSSION The research and data collection is supported with the test of lone hypothesis The hypothesis was tested on the basis of data collected from the sample firms in designated research area As the data was collected by using point likert scale, so the reliability of scales was first checked with the help of Cronbach’s Alpha technique (Table No 2) The table shows Cronbach’s alpha value 0.947 which is more than the acceptance level 0.7 The value supports to conclude that scale was found reliable After the success of reliability test, T test then was applied to test the hypothesis on the basis on data recorded As shown in the table no 3, the t values of all 10 variables along with the degrees of freedom The test was applied at 67 degrees of freedom and percent level of significance As per calculated values the P (Sig.2) value for all the variables is less than the level of significance Hence the data fails to accept the Null Hypothesis; “Fruits and vegetable firms under small scale agro food processing industry in Pune district are not facing enterprise challenges” CONCLUSION The different findings of the study helped a lot to come to the conclusion of the study From the analysis of the relative position of small scale fruits and vegetable processing firms in Pune district, it can be concluded that fruits and vegetable processing constitute an important part of the agro processing sectors and also contribute to employment generation and value of output Fruits and vegetable processing is taking an emerging shape and becoming need of the hour The study was designed for that purpose only and collected data and analysis substantiated the research rational Fruits and vegetable processing small scale firms were found contributing a lot to meet the demand at ground level As the firms were huge in number and spread in a wide area so availability of products was smooth in the research region However, their capacity was less and hence resources as well The study also explored the phenomena related to the enterprise challenges faced by small scale fruits and vegetable firms in Pune district Firms were facing enterprises challenges which were concluded as hindrance in the potential growth of firms It can eventually be concluded through the study that very less small scale fruits and vegetable processing firms were registered with Pune DIC http://www.iaeme.com/IJM/index.asp 190 editor@iaeme.com Dr Vimal Deep Saxena and Dr Rohini Suresh Sawalkar from 2008 to 2015, and most of these firms were facing enterprise challenges despite being the introduction of a lot of supportive schemes and facilities REFERENCES [1] Aggarwal Nidhi, 2009, Fruit and vegetable processing industry in northern India opportunities and challenges, http://shodhganga.inflibnet.ac.in/handle/10603/79959 [2] Barman K K; Devi Namita, (2003), Fruits and Vegetable Processing Industry in Assam – An Economic Analysis of Three Tiny fruits and Vegetable Processing Units, Indian Journal of Agricultural Economics; Vol 58, Issue 3; pg 607, http://search.proquest.com/business/docview/201556651/fulltextPDF/A8296159029D49A DPQ/1?accountid=38883 [3] Dr Ian Lambert, Problems and Constraints to the Development of the Agro-Processing Sector, http://www.open.uwi.edu/sites/default/files/bnccde/dominica/conference/papers/Lambert html [4] Jean-Claude Moubarac & Diana C Parra & Geoffrey Cannon & Carlos A Monteiro, (2014), Food Classification systems Based on Food Processing: Significance and Implications for Policies and Actions: A Systematic Literature Review and Assessment, http://www.researchgate.net/publication/260572320 [5] Joshi G G; Nawadkar D S; Mali B K; Shinde H R, (2003), Growth of Fruits and Vegetables Production and Processing Industries in the Era of Liberalisation, Indian Journal of Agricultural Economics; Jul-Sep; Vol 58, Issue 3; pg 605 http://search.proquest.com/business/docview/ 201459542/fulltextPDF/ [6] Kachru RP (2006) Agro-Processing Industries in India-Growth, Status and Prospects Indian Council of Agricultural Research New Delhi, India [7] Kachuru, R.P (2006), Agro-Processing Industry in India: Growth, Status and Prospects, Indian Council of Agricultural Research, Government of India [8] KPMG (2009), Consumer Markets: Food Processing and Agri Business, KPMG India, Mumbai [9] Kumar, Ranjit, 2005, Research Methodology-A Step-by-Step Guide for Beginners, (2nd.ed.), Singapore, Pearson Education [10] Lahidji, Reza, The agro-food sector in the 21st century, Organisation for Economic Cooperation and Development The OECD Observer, Feb/Mar 1998, Paris, ISSN 00297054, http://search.proquest.com/business/docview/217460481/abstract/27B4740B3BA0468AP Q/33?accountid=38883 [11] M Malagié, G Jensen, J.C Graham and Donald L Smith, 4rd edition “Encyclopaedia of Occupational Health and Safety, http://www.ilocis.org/documents/chpt67e.htm [12] Saxena Vimal Deep, 2015, A Literature Review Study Of Challenges Of Selected Small Scale Agro Food Processing Industry In Pune District, Make in India: Opportunities & Challenges in Sinhgad Business School, Pune; ISBN No 978-93-5254-062-4 [13] Saxena Vimal Deep, 2015, Making Cluster: A viable solution to confront various challenges to MSMEs, Emerging Trends in Management and IT: a Way towards Sustainability in Corporate World” in MIT College of Engineering’s Centre for Management Studies and Research, Pune; ISSN; IJESR 223155-5535 Vol.4 Issue [14] Saxena Vimal Deep, 2016, Challenges in Digitalization in Food Processing Industry in India, Redefining Boundaries: The Digital Way” in Sinhgad Business School, Pune; ISBN No 978-93-5158-582-4 http://www.iaeme.com/IJM/index.asp 191 editor@iaeme.com A Study to Understand the Enterprise Challenges in Small Scale Agro-Food Processing Firms [15] Shah seena and Ghazzawi issam a (2012), bc frozen foods limited: challenges and change, journal of the international academy for case studies, volume 18, number 7, http://search.proquest.com/business/docview/1081808613/fulltextpdf/4818ebe0508e4be6p q/14?accountid=38883 [16] Mohd Izhar Ariff Mohd Kashim, Mat Noor Mat Zain, Md Yazid Ahmad, Ezad Azraai Jamsari and Diani Mardiana Mat Zin, (2018), Haram Sources in Food Processing According to Shariah Perspective, International Journal of Civil Engineering and Technology, 9(4), pp 1437–1443 [17] Dr C Mahadeva Murthy, Dr Veena K.P, (2013), Prospect of Effective Cost Management: A Study of Successful and Unsuccessful Small Scale Units in Mysore District, International Journal of Marketing and Human Resource Management, 4(3), pp 10–18 [18] Kadam Nivedita Arun, (2012), Production Planning Module of ERP for Small Scale Industry, International Journal of Production Technology and Management, 3(1), pp 1–8 [19] Arvind N Nakiya, Kanaksinh V Vala, Vallabh B Bhalodiya, (2014), Energy Conservation in Electrical Machines from Small Scale Food Industry, International Journal of Electrical Engineering and Technology, 5(3), , pp 81–86 [20] http://dcmsme.gov.in/ssiindia/MSME_OVERVIEW09.pdf [21] http://ficci.in/sedocument/20073/Food-Processing-bottlenecks-study.pdf [22] http://foodprocessingindia.co.in/images/pdf/Budget_2015-16.pdf [23] http://foodprocessingindia.co.in/sector-profile/fruits-andvegetables.html [24] http://www.makeinindia.com/sector/food-processing [25] https://www.ibef.org/industry/indian-food-industry.aspx http://www.iaeme.com/IJM/index.asp 192 editor@iaeme.com ... http://www.iaeme.com/IJM/index.asp 187 editor@iaeme.com A Study to Understand the Enterprise Challenges in Small Scale Agro-Food Processing Firms reference to the small scale enterprises Small scale enterprises in India... Enterprise Challenges in Small Scale Agro-Food Processing Firms [15] Shah seena and Ghazzawi issam a (2012), bc frozen foods limited: challenges and change, journal of the international academy for case... [19] Arvind N Nakiya, Kanaksinh V Vala, Vallabh B Bhalodiya, (2014), Energy Conservation in Electrical Machines from Small Scale Food Industry, International Journal of Electrical Engineering and