Assocham asks AP to usher in agri supply chain reforms

Industry body Assocham has called for a suitable policy action for establishing efficient supply lines in perishable agriculture products in Andhra Pradesh.

“The state government must enact a policy that cuts the supply lines in order to connect farmers directly to organised processors, retailers and exporters,” said the Associated Chambers of Commerce and Industry of India (Assocham) as part of its development agenda for AP.

In its state-specific report, Assocham said streamlining the agri supply chain policies would help AP maintain its edge in the food processing sector, which has a 14 per cent investment share in country.

“The state leadership must strategise to develop the food processing industry scientifically but for that to happen, reforms are needed on two fronts -- 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 farmers need to be organised in clusters as producer organisations to create economies of scale at their level," said DS Rawat, national secretary general of Assocham.

With investments worth over Rs 11,500 crore, Andhra Pradesh accounted for 14 per cent share in the total outstanding investments worth over Rs 82,900 crore seen in 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).

As part of the policy suggestions, it said the state 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, and create conditions for the establishment of large modern plants.

It also wanted the state government to support capacity-building and human resource development at all levels, including streamlining the current syllabus and course curriculum at colleges, universities, industrial training institutes (ITIs) and polytechnics.

A total 1.8 million people were engaged in over 35,800 registered food processing units across India as of 2011-12. Of these, the food sector employed over 1.62 million, while over 140,000 were engaged in the beverage processing sector.