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MoFPI issues draft guidelines for agro processing clusters under Sampada
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Thursday, 23 February, 2017, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The ministry of food processing industries (MoFPI) has released a set of draft guidelines for infrastructure for agro processing clusters under the Sampada scheme. The ministry stated that this was primarily to develop agro processing clusters with modern infrastructure close to the production hubs. The project would also help in integrated and complete supply chain solutions from the farm gate to the marketplace.
According to the scheme, the basic requirement would be five units with a minimum investment of Rs 25 crore. And financial assistance, ranging between 35 and 50 per cent, would be provided subject to the difficult areas.
P K Jain, chairman, Associated Chambers of Commerce and Industry of India (ASSOCHAM) council on food processing and value addition, said that this was a well-directed move by the ministry, adding that it aimed at strengthening the sector.
He said, “It is a just a stage-by-stage process, from mega to medium to small clusters. It is a need-based approach. At every stage, the size will change. I think is this is like fitting things where they require attention.”
This is particularly relevant when it comes to requirement of land for the mega food parks, which has been a problem area for some time.
Arpita Mukherjee, professor, Indian Council for Research on International Economic Relations (ICRIER), said, “To address the issues faced by developers in getting large contiguous land, especially in small and hilly states, MoFPI proposed in June 2016 to set up 250 small- to mid-sized agro-processing clusters at an estimated cost of Rs 5,000 crore.”
“It was proposed that these clusters would be built near the producing areas with a subsidy of Rs 5 crore per cluster. Following the announcement, MoFPI recently released draft guidelines for the scheme for infrastructure for agro-processing clusters and invited comments,” she added.
Mukherjee said, “The scheme is likely to have two basic components of creating enabling infrastructure and core common facilities for the development of a cluster of a minimum of five food processing units with a minimum investment of Rs 25 crore.”
“Under the scheme, financial assistance will be provided in the form of grant-in-aid at the rate of 35 per cent of the project cost subject to a maximum of Rs 10 crore. This scheme is a sub-scheme of the Central Sector Scheme-National Mission for Food Processing (Sampada),” she added.
“Under the scheme, as opposed to the MFP scheme, the developer will have the flexibility to choose the size of the cluster rather than abiding by rigid requirements. This scheme slightly tries to address some of the concerns of the MFP scheme,” Mukherjee stated.
It is pertinent to the mention that MoFPI announced the Sampada scheme for cluster development last year and was awaiting the cabinet’s nod. Recently, the Cabinet Committee on Economic Affairs approved the scheme, and subsequently, the guidelines have been approved by the ministry.
A senior official with MoFPI stated, “The scheme is to be implemented in the areas of horticulture or agriculture production, identified through a mapping exercise. Other facilities like cold storage units, blast freezers, specialised packaging, individual quick freezing (IQF) and warehousing will also be facilitated.”
According to the basic criteria, the combined net worth of the promoters or proposed shareholders of the implementing agency should not be less than one-and-a-half times the grant amount sought. And the agencies need to bring in at least 20 per cent of the total project cost as equity/contribution in general areas and at least 10 per cent of the total project cost in difficult and hilly areas.
The guidelines also stated that the timeline for completion and operationalisation of the project would be 16 months from the date of approval, while the ministry would periodically review the progress of the projects under the scheme.
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