Hyderabad: Apex trade association Assocham has urged the Andhra Pradesh government to frame a separate policy for the food processing sector to establish supply lines needed for perishable agriculture products.

"The state government must enact a policy that cuts the supply lines in order to connect farmers directly to organized processors, retailers and exporters," the Associated Chambers of Commerce and Industry of India (Assocham) said in its development agenda for the state.

D.S. Rawat, national secretary general of Assocham, advised the state government to introduce reforms by bringing down taxes and commissions on food articles and also on processed food. He said the farmers should be organized in clusters as farmer producer organizations to create economies of scale at their level.

"A public-private partnership (PPP) model can be developed to help industry invest at the back end to streamline value chains and as a complimentary step, the state needs to focus on leveraging its strategic location advantage by building world class physical infrastructure facilities," said Rawat.

With investments worth over Rs.11,500 crore, Andhra Pradesh accounts for a share of about 14 percent in the total outstanding investments worth over Rs.82,900 crore attracted by the food processing sector by December 2014, according to an analysis conducted by the Assocham Economic Research Bureau (AERB).

Of the 35,800 food processing units across India as of 2011-12, united Andhra Pradesh had over 9,300 registered units employing about 2.6 lakh employees.