Determinants of Adoption and Performance of Agri-Allied Enterprises in Himachal Pradesh: An Integrated Analysis of Food Processing, Agri-Entrepreneurship and Agro-Tourism

Abstract

Purpose: Agriculture in Himachal Pradesh supports more than half of the state's workforce but contributes less than a sixth of its gross state value added, and almost nine in ten holdings are small or marginal. Agri-allied enterprises—food processing, farm-based entrepreneurship and agro-tourism—are widely promoted as routes to higher and more stable farm incomes in this mountain state. This paper reviews what is known about why households adopt these enterprises and what determines how well the enterprises perform, and integrates the three strands into a single analytical framework.

Design/methodology/approach: The study combines an integrative review of peer-reviewed literature on adoption, diversification, agri-entrepreneurship, value addition and agritourism with an analysis of secondary data from the Economic Survey of Himachal Pradesh 2024-25, parliamentary answers of the Ministries of Food Processing Industries, MSME, Agriculture and Tourism, and state department records.

Findings: Secondary data show rapid but uneven growth: 1,767 micro food-processing loans sanctioned under PMFME (2021-22 to January 2025), 44 PMKSY food-processing projects, 3,974 PMEGP units (2021-22 to 2024-25), 124 NABARD-promoted FPOs with 26,332 members, and about 4,289 registered homestays against 246 in 2010. The literature identifies five clusters of determinants common to all three enterprises: human capital (education, training, experience), resource endowments (land, capital, credit), institutional support (extension, collectives, schemes), market and infrastructure access, and socio-cultural factors (gender roles, risk orientation, community norms). Performance depends further on scale and capacity use, value-chain linkages, collective organisation and access to working capital. Enterprise-specific constraints include seasonality and raw-material dependence in processing, and regulatory and socio-cultural barriers in homestays.

Originality/value: The paper offers the first integrated framework linking food processing, agri-entrepreneurship and agro-tourism in the Himachal context, sets out testable propositions on adoption and performance, and outlines a research design for primary validation.