Andhra Pradesh needs policy on supply lines for perishable agriculture products
Hyderabad: Andhra Pradesh needs to set upfast-moving supply lines for perishable agriculture products to leverage the state's established strengths in the food processing sector, industry body Assocham said today.
The state government must enact a policy that cuts the supply lines in order to connect farmers directly to organised processors, retailers and exporters, it said. Assocham National Secretary General D S Rawat said that the state needs to develop food processing industry scientifically but for that to happen, reforms are needed on two fronts: (a) Taxes and commissions on food articles need to be brought down to minimum and taxes on processed food must also be kept as low as possible. (b) Farmers need to be organised in clusters as farmer producer organisations to create economies of scale at their level. He said a public-private partnership (PPP) model can be developed to help the industry invest at the back end to streamline value chains and as a complimentary step, the state needs to focus on leveraging its strategic location advantage by building world class physical infrastructure facilities.
With investments worth over Rs 11,500 crore, the state accounted for a share of about 14 per cent in the total outstanding investments worth over Rs 82,900 crore attracted by the food processing sector from both public and private sources across India as of December 2014, Assocham said. Besides, the new state also accounted for over 15 per cent share in the total outstanding investments worth over Rs 76,100 crore attracted by the food processing sector from private sector throughout India. The industry body said that streamlining supply chains requires institutional innovations and major investments, and organised retailers would be interested in streamlining the back-end operations only if they have full freedom to scale up their operations in the front end.
The government should treat food processing as a priority sector and remove it from the list of small-scale industry reservation, which limits the investment and scale of operations in these units. Large modern plants are what is needed. The Agriculture Produce Marketing Committee (APMC) Act needs to be amended by de-listing fruits, vegetables and other perishable agriculture products which would allow farmers to sell to anyone inside or outside APMC markets, Assocham suggested.
