Time to review Food Policy-2015

The Hans India reported the dream of the Chief Minister of Andhra Pradesh N Chandrababu Naidu as “My goal is to promote inclusive economic growth in primary sector and farmers’ happiness.”

However, in order to make agriculture (the accursed primary sector in the interiors) a viable business proposition, lot many corresponding areas need to be addressed in the required direction before a workable blueprint is drawn.

One of the major issues faced by farmers is lack of warehousing for their produce. Due to inadequate warehousing facilities at the village level, they are compelled to sell their produce at cheap rates, incurring losses, which, in turn, lead to despair and even penury.

When produce rates are low, a farmer does not even take them to the market yard. He would rather store it at his village, waiting, and hoping against hope, for the prices to pick up.

The million-dollar question then is how does one improve the current situation? Andhra Pradesh Food Processing Society (APFPS) has been doing a commendable job in improving food processing. The Society has conceptualised ‘Scheme of Primary Processing Centres/Primary Collection Centers” under the Food Policy 2015-20.

One of the aims of the scheme is to create/improve warehousing infrastructure for which 50 percent subsidy on building and machinery is sanctioned, subject to a maximum of Rs 2.5 crore.

Requirements of the scheme are locating the warehouse in a village on a land holding of one to two acres, along with other components. The first requirement is understandable but insistence of a minimum of one to two acres of land holding is creating problems at the ground level.

A majority of farmers in a village are small and marginal. Even if one daring entrepreneur constructs a big godown in a village on one acre of land, its occupancy for a major part of the year is doubtful. Even an acre of land holding costs not less than Rs 30 lakh.

Who can block capital, without any use? Consequently, there is no financial viability for the project. Further, ground realities suggest this much land holding is not at all necessary for starting a primary processing/collection unit in a village. As a result, no entrepreneur is coming forward to construct rural godowns.

As an empanelled consultant to APFPS, suggestions were made to reduce the minimum land holding to half-an-acre or totally eliminate the minimum land holding clause to make the scheme more popular and acceptable in rural areas. This minimum land holding clause could not be changed as it was treated as a Food Policy matter.

Presently, to avail the benefit under the above scheme, there is no minimum requirement of godown size, but the land holding size exists. One can build a small rural godown of 1,000 sft. provided the entrepreneur holds that minimum stipulated one acre land holding.

To facilitate farmers to avail the benefits of the scheme, it is advised to leave the land holding aspect to the entrepreneur who is a better judge, depending on economic viability. One wonders if big investors will come forward to set up agro-processing industries in rural areas, particularly in interior locations of Vizianagram and Srikakulam?

Make limited rules for compliance in the process of ‘Ease of doing businesses. To make agriculture a viable business activity, it is time to review the Food Policy 2015-20 under which the scheme has been designed. This will eliminate ground-level bottlenecks and make the schemes more common farmer friendly. (The writer is an agro-processing consultant)

By C Rama Gopal