Hide News  Announce separate policy to establish supply lines for perishable agri products: ASSOCHAM plea to AP govt.
Mar 04, 2015  18:18
The government of residual Andhra Pradesh (AP) state must announce a separate policy for establishing fast-moving supply lines needed for perishable agriculture products thereby leveraging from the state's established strengths in the food processing sector, apex industry body ASSOCHAM said.

�The state government must enact a policy that cuts the supply lines in order to connect farmers directly to organized processors, retailers and exporters,� suggested The Associated Chambers of Commerce and Industry of India (ASSOCHAM) as part of its the development agenda for the present Andhra Pradesh state.

�The state leadership must strategize to develop the 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; and (b) farmers need to be organized in clusters as farmer producer organizations to create economies of scale at their level,� said Mr D.S. Rawat, national secretary general of ASSOCHAM.

�A public-private partnership (PPP) model can be developed to help 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,� said Mr Rawat.

�Promoting value addition in agriculture sector, encouraging farmers to produce and export high-value fruits and vegetables using modern farming technologies and high quality seeds thereby creating opportunities for them to double their incomes are certain key steps which should be duly supported by setting up food processing centres and world-class agriculture universities across the state,� he added.

With investments worth over Rs 11,500 crore, the residual AP 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, according to an analysis conducted by the ASSOCHAM Economic Research Bureau (AERB).

Besides, the new AP 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.

ASSOCHAM suggestions to usher in agriculture reforms in AP:

1. Streamlining supply chains requires institutional innovations and major investments. Organized retailers will be interested in streamlining the back-end operations only if they have full freedom to scale up their operations in the front end. Normally, in organized retail, handling fresh produce and sourcing directly from small and marginal farmers is the last bastion to conquer as it is the most difficult. Eighty to ninety per cent of produce in organized food retail is processed. So, attention must first be paid to scale up food-processing activity and to connect farmers to the processors.

2. 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.

3. In the current global and national economic context, market forces are key to unleashing the true potential of the agricultural sector. Corporate involvement through vibrant agri-businesses and food-processing can considerably enhance value for farmers by linking them to the value-seeking markets.

4. 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.

Promoting horticulture, floriculture, medicinal plants and herbs:

1. Diversification from traditional crops to plantations, orchards, flowers, vegetable gardens and bamboo plantations.

2. Extension of appropriate support services to farmers for high-tech horticulture including precision farming.

3. Improve post harvest management, processing for value addition and marketing infrastructure.

4. Adopt a coordinated approach and promote partnership, convergence and synergy among R&D, processing and marketing agencies in public as well as private sectors, at the national, regional, state and sub-state levels.

5. Promote FPOs and their tie up with Market Aggregators (MAs) and Financial Institutions (FIs) to support and ensure adequate returns to farmers.

6. Support capacity-building and Human Resource Development at all levels, including, change in syllabus and curriculum of courses at Colleges, Universities, ITIs, Polytechnics, as appropriate.

Transforming dairy industry:

The state government must play the role of facilitator in transforming dairy farmers into dairy entrepreneurs in the state. Essentially it needs to effectively provide the following support to the farmers:

1. Develop and disseminate appropriate smallholder-based dairy technology.

2. Facilitating collective arrangements that will enable cooperatives to acquire dairy animals, feeds, veterinary and other supplies, materials, equipment, services of all kinds and other dairy inputs under favourable terms.

3. Encouraging commercial dairy farming and increase production and productivity by extension and breed development.

4. Ensuring availability of smaller processing facilities. Small milk collection machines could be purchased for a community of farmers and used collectively. This will address one of the biggest issues in the dairy industry that of unhygienic milk collection.

5. Providing a forum for the members of cooperatives to discuss common problems affecting production, marketing and the cooperatives' relationships with the authority.

United AP had highest share in no. of registered food processing industries & people engaged therein:

United Andhra Pradesh state had topped with highest share of 14.5 per cent in the total number of people engaged in food processing sector across India as of 2011-12, according to an ASSOCHAM analysis of Annual Survey of Industries conducted by the Ministry of Statistics and Programme Implementation (MoSPI).

Besides, erstwhile AP also garnered highest share of over 25 per cent in the total number of registered food processing industries in India, according to an analysis of Annual Survey of Industries, 2010-11.

A total of about 18 lakh people were engaged in over 35,800 registered food processing units across India as of 2011-12. Of these food sector employed over 16.2 lakh people while over 1.4 lakh people had been engaged in beverage processing sector.

Of the total number of food processing units across India, united Andhra Pradesh had over 9,300 registered units employing about 2.6 lakh employees, further noted the analysis conducted by the ASSOCHAM Economic Research Bureau.

Majority of food processing units in the erstwhile AP were in food sector (over 8,700 units) that also employed over 2.3 lakh people while there were over 280 units in the beverage sector employing over 20,000 people in the state.

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