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“Land use conversion, financial closure, statutory clearances hamper the progress of mega food park projects”
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Monday, 01 August, 2011, 08 : 00 AM [IST]
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 A L Meena, joint secretary, Ministry of Food Processing Industries, in a conversation with Irum Khan comes clear on what is ailing the mega food park projects in the country, what needs to be done in this regard and more. Excerpts
You played a crucial role in materialising the concept of mega food park? What was the idea behind launching this concept?
The level of food processing in India is very low. Therefore, with a view to create infrastructure for facilitating setting up of food processing industries in large numbers, the concept of mega food park was envisaged. The mega food parks concept provides for hub and spoke model wherein a central processing centre (CPC) with a network of primary processing industries and collection centre is to be established. In CPC, common facilities required for food processing industries such as cold storage, dry storage, water supply, electricity, food testing labs, HRD centres, incubation facility, sheds for MSMEs, pulping line, packaging facility, irradiation etc. is developed by the special purpose vehicle (SPV). It is made available to the players on rental basis thereby substantially reducing the capital expenditure of individual food processors. SPV provides for 30 to 40 developed industrial plots at reasonable lease rentals to the processors for setting up their units.
How many mega food parks have been set up so far, how many more are in the pipeline?
During the 11th Plan, 30 mega food parks are proposed to be established. In 2008-09 and 2009-10, 10 projects were approved, 5 additional projects have been approved in April, 2011. In current year’s budget, setting up of 15 additional mega food parks have been announced by the Finance Minster.
Out of first phase projects, most of the common facilities are in place in Patanjali Herbal Mega Food Park. About 7 industries are already operational. Substantive increase in the income of farmers and value addition is evident in the area.
In Srini Mega Food Park in Andhra Pradesh, mostly common facilities are established. Already processing of guava, tomato, pineapple and mango has been undertaken. Industrial plots are now available to be leased to the stakeholders. Infrastructure development is underway in mega food parks in Nalwari in Assam, Jangipur in West Bengal and Dharampuri in Tamil Nadu.
Final approval has recently been accorded to setting up of mega food parks at Tumkur in Karnataka and Fazilka in Punjab. ‘In principle’ approval has been accorded for Jagdishpur in Uttar Pradesh, Aurangabad in Maharashtra, Baroda in Gujarat, Bhagalpur in Bihar, Chhindwara in Madhya Pradesh, Agartala in Tripura and Raigarh in Orissa.
Who have benefited the most from these parks and in what way? Can you name a few?
Wherever the parks have become operational, the beneficiaries are farmers and processors of the area. Farmers have assured market for their produce. Rates of agri produces in the area have gone up resulting in higher income to the farmers. Small and medium food processors have also been benefited due to common facilities as well as supportive environment. True impact assessment would, however, be possible after few more parks actually start commercial production.
A source from the industry has said that mega food parks are not serving the purpose they are meant to, for instance, farmers still prefer small agri-processing clusters to mega food parks as they find them accessible. What do you have to say about it?
I have already answered the same in the above question.
When the government gives a subsidy of Rs 50 crore in setting up these food parks, are there any controls placed for monitoring their functioning post-establishment?
There is proper system of monitoring. During implementation as well as after establishment through professional agencies in the form of project management agency, apart from ministry nominated official as director in the board of directors.
There were media reports saying that many mega food park owners have opted out of investing and also returned the subsidy, due to bureaucratic delay. What was the issue?
Denied. Whomsoever has opted out, has been due to inability of the concerned SPV to carry forward the project in accordance with the guidelines and time-frame.
Why have big companies not shown interest in these parks? Is this the reason for the low FDI coming in for the project?
It is relevant to note that now major food processing companies are evincing interest in mega food parks. Companies like Pantaloon Retails, Capital Foods, Aditya Birla Nuvo, Ozone Pharmaceutical, International Farm Fresh, Anil Starch, Betur Oil, Keventer Agro etc. are already associated with various parks. As regards FDI in mega food parks, there are many enquiries and in few cases, plots have also been allotted to foreign companies. It is hoped that in times to come, FDI in food processing in mega food parks will go up.
Do you think we need to revise the mega food park proposal in order to accommodate more farmers and small level processors?
This is adequately covered in the existing guidelines.
What are the other major projects of the MoFPI that you are currently involved in?
Ministry is implementing integrated cold chain infrastructure projects, modernistion of abattoirs, HRD, technology upgrade scheme, quality assurance, R&D, labs and institutional strengthening.
What are the challenges in terms of infrastructural and regulatory hurdles that the food processing industry has to still overcome?
Lack of post-harvest infrastructure particularly processing, storage and supply chain management is a major challenge. As regards regulatory framework, enactment of Integrated Food Law and setting up of Food Safety and Standards Authority of India are major facilitations.
The obligation of having at least five promoters for a single mega food park has led to internal problems among promoters, so much so that Chordia Foods from Pune has already returned the subsidy. What is your take?
The experience of having 5 or more promoters in the SPV has been studied by the ministry and it was felt that mobilising 5 or more than 5 entrepreneurs and taking them along was little difficult task. Therefore, this number has been reduced to 3 last year itself. As regards return of subsidy by Chordia Foods, Pune, is concerned; in-principle approval was given for setting up of a mega food park to SPV but due to inability of the SPV to carry forward the project further, SPV had withdrawn and accordingly the grant amount was refunded.
Another issue which came up was the lack of flexibility with regard to documented rules by the government and excessive monitoring which occasionally turned into warnings to the food processors. Do you agree?
I do not agree with the view of excessive rigidity or monitoring. Rather, the scheme guideline provides enough scope of flexibility to the SPV in terms of trying new ideas and experimenting initiatives. As regards monitoring is concerned, this is just appropriately carried out with a view to ensure observance of the guidelines of the schemes and also to guide and facilitate the SPV, for effective implementation of the project. There has to be a system of proper reporting, close follow up and monitoring to ensure proper utilisation of resources including the governmen
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