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AP should formulate supply chain policy
Industry body Assocham on Tuesday suggested to Andhra Pradesh to establish fast-moving supply lines for perishable agriculture products so that the residual state could leverage its established strengths in the food processing sector.
Assocham says state should leverage its strengths in food processing
Hyderabad: Industry body Assocham on Tuesday suggested to Andhra Pradesh to establish fast-moving supply lines for perishable agriculture products so that the residual state could leverage its established strengths in the food processing sector.
“The state government must enact a policy that cuts the supply lines in order to connect farmers directly to organized processors, retailers and exporters,” said the Associated Chambers of Commerce and Industry of India (Assocham) as part of its the development agenda for the present AP state.
Suggesting to the AP government to develop food processing industry scientifically; D S Rawat, National Secretary General, Assocham, said for that to happen, the state needs reforms 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.
He further said that a public-private partnership (PPP) model could be developed to help the industry invest at the back end to streamline value chains and as a complimentary step, the state should focus on leveraging its strategic location advantage by building world class physical infrastructure facilities.
“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. According to an analysis carried out by the industry body, AP is one of the attractive destinations for food processing investments in the country. 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 also 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.
