The Hindu : Independent ministry for food processing mooted

Online edition of India's National Newspaper
Sunday, Jan 18, 2004

Andhra Pradesh

Andhra Pradesh

Independent ministry for food processing mooted

By K. Venkateshwarlu

HYDERABAD, JAN. 17. Inadequate policy support, high taxes, high proportion of unorganised sector with low or no technology, multiplicity of laws, lack of credit and cold storage have been identified as some of the problem areas requiring immediate attention, according to a study on opportunities and challenges in food processing industry in the State.

The study carried out by S. Mahendra Dev and N. Chandrasekhara Rao of the Centre for Economic and Social Studies (CESS) for the International Food Policy Research Institute (IFPRI) and the State Government, also pointed to the high price elasticity of consumers, low capacity utilisation, lack of insurance facilities, lack of pre-cooling units, roads, extension services, quality testing facilities, brand development and low per capita production.

On the positive side, the study cited as strengths of the State, high production of raw material, cheap labour, large domestic market base, trained manpower and a network of research institutions. Dr. Dev presented the details of the study, "Agro-processing in Andhra Pradesh: Opportunities and Challenges", at a seminar on "Agricultural exports and food processing", organised by IFPRI at the Acharya N.G. Ranga Agricultural University campus here on Friday.

The study made a series of policy recommendations. It suggested bringing all food processing industries under an independent Ministry and creation of a separate department at the State level. It recommended encouragement to contract farming in fruits, vegetables, poultry, feed crops like maize, soybean, organic rice and other products and large players in these fields attracted to set up units.

Other institutional changes it suggested were establishment of export zones

for poultry in East and West Godavari districts, fisheries in Nellore or Prakasam and for meat in Medak. Such zones for chillies be located at Guntur and for banana at Pulivendula in Kadapa.

The Government could also start crop centric processing zones for pomegranate, papaya, guava, cashew, banana and vegetables.

Another important recommendation was removal of sales tax and market cess on food processing industries, till the formation of critical mass and relaxation of duties and taxes on packing material. Poultry sector needed to be treated on par with agriculture for electricity tariff and taxes.

Marketing plans could be evolved to encourage food processing products manufactured within the State covering the recently emerging super markets, institutional sales and DWCRA bazaars.

On the infrastructure side, it suggested setting up of an incubator to advise on food processing ventures and attracting private investments in small pre-cooling units, medium to small cold storages having multi-product and multi-chamber facilities.

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