Despite being an Agri hub AP laggards in value addition

The food processing industry in Andhra Pradesh is grappling with a severe shortage of processing units, stymying the sector’s growth potential and affecting local agricultural productivity.

Despite being one of India’s major agricultural hubs, the state’s underdeveloped food processing infrastructure is limiting its ability to add value to its vast agricultural outputs.

Recent reports reveal that Andhra Pradesh, while producing a significant amount of fruits, vegetables, and grains, lacks the requisite number of modern food processing units to effectively handle and process these resources.

Despite this impressive production capacity, a significant portion of these agricultural products is left unprocessed. Without dedicated food processing units, the state struggles to add value to these raw materials, limiting their marketability and profitability.

The scarcity of state-of-the-art processing facilities is preventing the efficient transformation of raw agricultural products into finished goods.

“Food processing units can transform raw produce into value-added products such as packaged foods, beverages, and processed snacks. Since integrated facilities do not exist in the state, we process the ready to cook/eat products in facilities located in Bengaluru or Chennai,” stated Mr NSR Prabhakar Varma, Director, Rasapoorna Foods Pvt Ltd. speaking to Vizag Industrial Scan.

He also said that there is a need for dedicated food processing zone for dairy products and agriculture food processing as there is a lot of produce, especially from North Andhra.

The establishment of food processing units offers considerable economic benefits, including job creation. Processing plants require a range of skilled and unskilled workers.

In rural areas, where unemployment rates are often higher, these jobs can provide much-needed income and improve living standards.

In Andhra Pradesh, the food processing sector faces a significant challenge due to the lack of visibility for raw materials. This opacity hinders efficient supply chain management and disrupts production schedules, impacting overall productivity.

The absence of a streamlined system to track and forecast raw material availability creates a bottleneck, leading to delays and increased costs for food processors. Farmers and suppliers often struggle to connect with processing units, exacerbating the issue.

Mr Prabhu Kiran, MD of Naturade Foods, said, “Implementing better data transparency and communication channels could enhance operational efficiency, ensuring a more reliable supply chain and fostering growth in this vital industry.”

He further added that food processing is a versatile sector and if there is government support when it comes to value-added products, the sector has a lot of scope to grow and expand.

Moreover, food processing units can stimulate local economies by supporting ancillary industries such as packaging, logistics, and distribution.

One of the most pressing issues in the absence of food processing units is the high level of wastage. Perishable goods, including fruits and vegetables, often spoil before they reach consumers or processing facilities.

This waste translates into significant financial losses for farmers and increased pressure on the environment due to the disposal of unsold produce.

Dedicated food processing units can address this problem by providing essential infrastructure for cold storage and preservation.

By extending the shelf life of perishable products, these facilities can help reduce waste, ensure food security, and stabilize market prices,” believes Mr O Naresh Kumar, President, Vizag Development Council.

Dr Y Geeta Srikanth, MD, L B Agro Products, shared, “Andhra Pradesh is renowned for its diverse agricultural output, including rice, groundnuts, fruits, and vegetables.

A lot of natural products like tamarind, turmeric, jackfruits, pineapple, etc, are grown in the tribal areas of Andhra Pradesh. However, the state’s food processing sector remains underdeveloped compared to its agricultural capabilities.”

Mr Sharad Kumar Sharma of Laddu Gopal said, “We have been in the food business for a long time now and we wish to set up a food processing unit in the city, provided we are given support in terms of land and tax benefits and loan at low interest rates.”

“AP government should bring new food processing industrial policy and help entrepreneurs to get maximum benefit of MOFP schemes to make the food processing society more active in promoting and coordination,” said Mr D T Raju, Executive Chairman of Vijaynagar Bio-tech Pvt Ltd.

To realize the full potential of food processing in Andhra Pradesh, targeted efforts are needed to address existing infrastructure and policy gaps.

This includes investing in state-of-the-art processing technology, improving transportation and logistics networks, and implementing supportive policies and incentives for investors.