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MoFPI expects mega food park projects to be operationalised by 2019-20
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Wednesday, 07 March, 2018, 08 : 00 AM [IST]
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Ashwani Maindola and Shraddha Joshi
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Thirty-three of the 42 projects envisaged by the ministry of food processing industries (MoFPI) are pending, and are expected to become operational by 2020. This was stated by a senior official with the Harsimrat Kaur Badal-led ministry.
Currently, only nine mega food parks are functional. Six are expected to be up and running by April 2018, and a dozen more are expected to become functional next year.
While MoFPI has no information about the number of units running in the functional mega food parks, it has been learnt that Patanjali Food and Herbal Park Pvt Ltd in Haridwar, Uttarakhand, is the only mega food park that is fully functional. It became operational in 2014.
The first deadline was between 2012 and 2017, i e during the 12th Five-year Plan [under which the National Mission on Food Processing (NMFP) got underway]. It was within NMFP that MoFPI had set the original target to operationalise the 42 mega food parks.
The National Democratic Alliance (NDA) government, led by the Bharatiya Janata Party (BJP), reviewed the projects in the interim.
However, overall, the mega food park scheme, which commenced amidst a great deal of fanfare and was expected to transform the food processing industry pan-India, hasn’t taken off along the expected lines, despite the efforts.
Upon assuming office as minister of food processing industries, Badal revised the target for the operationalisation of all 42 mega food parks to 2018. However, this was followed by a delay by another year, and now the ministry expects all of them to be up and running two years hence.
As per MoFPI’s status report, four mega food parks are complete. These are as follows:
• Srini Food Park Pvt Ltd, Chittoor, Andhra Pradesh
• Integrated Food Park Pvt Ltd, Tumkur, Karnataka
• Indus Mega Food Park Pvt Ltd, Khargone, Madhya Pradesh
• Patanjali Food and Herbal Park Pvt Ltd, Haridwar, Uttarakhand
In addition to the above, as per the ministry’s status report, five mega parks are operational. These are as follows:
• North-East Mega Food Park Ltd, Nalbari, Assam
• Jharkhand Mega Food Park Ltd, Ranchi
• MITS Mega Food Park Ltd, Rayagada, Odisha
• International Mega Food Park Ltd, Fazilka, Punjab
• Jangipur Bengal Mega Food Park Ltd, Murshidabad
S S Thorat, head, department of food science and technology, Mahatma Phule Krishi Vidyapeeth, Rahuri, said, “The mega food park scheme, which was supposed to be a boon for the food processing sector, really seems to be a failure to some extent, due to the lack of proper planning.”
“During the initial stage of planning, it was expected that on an average, each project may have about 30-35 food processing units with a collective investment of approximately Rs 250 crore, that would eventually lead to an annual turnover of Rs 450-500 crore and create direct and indirect employment of 30,000 persons, but the criteria have not yet been met due to the lacklustre approach of the government. MoFPI, instead of establishing mega food parks, should come up with small clusters of food processing,” he added.
The project is unviable, and experts have attributed its lack of sustainability to the high rate of taxes levied on processed foods.
Arpita Mukherjee, professor, Indian Council for Research on International Economic Relations (ICRIER), stated that the delays in project implementation were attributable to various reasons.
“The parks may be located in remote areas with lack of connectivity. There are difficulties in land acquisition, rigid requirements under the scheme, etc.,” she added.
“In India, the rates of taxes imposed on processed foods are high. The high tariffs on imported inputs make them difficult to have a global supply chain, and the high corporate taxes for larger firms deter scale expansion,” Mukherjee said.
According to the report published by ICRIER for MoFPI, getting the necessary clearances and approvals like power, water, the environment, etc., from the state governments, the issues faced in getting units/in entering agreements with food processors, issues with financial institutions (such as the high interest rate, the collateral required, etc.), the issues faced while entering agreements with farmers for the supply of raw materials, issues regarding the acquisition of contiguous land, issues regarding the amount of loan applied for from, and actually sanctioned by, the financial institution, issues with respect to the selection criteria adopted by MoFPI and political interference are some of the reasons for the delay in project implementation.
Interestingly, the delay on MoFPI’s part in releasing the grant was also one of the key issues highlighted in the study.
Status of Implementation of 42 Mega Food Park projects as on 06.02.2018
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