Creating an Agri based quality value chain in the field of Food Processing by the Government of Andhra Pradesh

Andhra Pradesh is strategically located on the south eastern coast of India and is a natural gateway to East and Southeast Asia. The state has a population of 4.93 crore (as per population census-2011), accounting for 4% of country’s population, residing in 4.9% of country’s geographical area. The GSDP of Andhra Pradesh at current prices for the year 2019-20 is estimated at Rs. 9,72,782 crores as per socio-economic survey of Andhra Pradesh 2019-20. The growth in 2019-20 was 8.16% significantly higher than all India GDP growth rate of 5.0% as per advance estimates. The sectoral growth rates of GVA of the state for 2019-20 at constant (2011-12) prices are Agriculture: 8.60%, Industry: 5.67% and Services Sector: 9.11%. The Per Capita Income (NSDP) of the state for 2019-20 at current prices has registered a growth of 12.14 percent, which significantly exceeds all India per capita income growth of 6.25% during the same period.

 Andhra Pradesh occupies a premier position in the country’s agribusiness industry with major contribution in agriculture, horticulture, dairy, poultry, fisheries and marine production. Around 60% of the state’s population is employed in agriculture and related activities, which makes food processing as one of the major thrust areas of the state. The state ranks first in India in productivity of Oil Palm, Cocoa, Acid Lime, Papaya, Tomato and Chillies. Ranks second in productivity of Mango, Sweet Orange and Turmeric. Andhra Pradesh is one of the major milk producer and stands 4th in the country with a production of 152 LMT, Meat production stands 4th with 8.5 LMT and stands 1st in the production of egg with 2177 cr (in No.s). The State stands in 2nd position in productivity of Paddy and Maize with 127 LMT & 18 LMT respectively. The share in Seafood exports value in the country is 36.11% and stands first in production of shrimp with 66.67% share. The state is the leading producer of Ground Nut and Millets.

 Food Processing Industry in Andhra Pradesh has gained prominence in recent years. Availability of raw materials, changing lifestyles and appropriate fiscal policies has given a considerable thrust to industry’s growth. This sector serves as a vital link between agriculture and industrial segments of the economy. Strengthening this link is of critical importance to reduce wastage of agricultural raw materials, improve the value of agricultural produce by increasing shelf-life, fortify the nutritive capacity of food products and ensure remunerative prices to farmers as well as affordable prices to consumers.

 Around 42% of the output comes from unorganized sector, 25% from organized sector and rest from Small Players. The farmers produce is not always guaranteed to the demand and quality. The market intermediaries play a vital role and most of the times either the farmers get exploited or their products get wasted in a usual agri-marketing scenario. The burden lies on the government(s) again to provide the MSP to the farmers and to store & distribute the yield. In most of the cases either the yield is being under rated or being rotten in the government godowns due to lack of channelization in distribution. This can be addressed through proper structuring of Food Processing sector.

 Food Processing sector acquires high priority as it reduces post-harvest losses, brings value addition in agriculture, creates high export potential, and gives greater bargaining power to the farmers for their products and improves the living standards of people. This sector will be a boon for SMEs and lead to food security as supply varies because of inaccuracies in demand and price and predictability of rains.

 In the above scenario the GoAP in line with the vision of Hon’ble Chief Minister Shri Y. S Jagan Mohan Reddy, has come up with a new initiative (A first of its kind in the country) where the farmer and processor shall be benefited, evacuating the middle men and other contingencies.  

Accordingly, the GoAP intends to develop Secondary Food Processing Clusters (Plug & Play), one in each Parliamentary constituency depending on the variety and quantum of Agri produce in that region, creating a continuous demand to the farmers produce ensuring that they are no longer be exploited. The main objective of this program is to involve the players of National & International repute (MNCs) with an established market, processing a diverse distribution and customer chain. This initiative aims at value addition to the farmers produce and to insulate them from the vagaries of market fluctuations by providing remunerative prices.

This system shall provide interface between farmers/FPOs and food processing industries. This initiation shall provide synchronization between major food industry players, our farmers and consumers across the globe through innovation establishing a viable, best quality, farmer friendly and consumer safe food value chain.

 This ensures a constant supply chain of quality and variety of food products to consumers besides opening new vistas of entrepreneurship and the rural landscape can be enriched by economic activity and prosperity. Thus, the initiative shall act as a catalyst for bringing in greater investment into this sector, guiding and helping the industry and cause a favorable environment for healthy growth of the farmers and food processing industry.