1,100 processing units commissioned in 47 food parks: Harsimrat Kaur Badal

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In the November issue of NuFFooDS Spectrum we covered Mega Food Parks. In response to our questions on financial assistance to old and upcoming food parks, Harsimrat Kaur Badal, Minister, Food Processing Industries, Government of India, shared information about her ministry’s support to the industry and steps to boost the Food Processing Industries and incentives offeried to investors in setting up food parks in India.

There are 14 food parks in operation partially since 2000-01 across India. Now your ministry is keen on setting up 25 new mega food parks. What kind of support will Ministry of Food Processing Industries (MoFPI) be providing to old and incomplete parks (as the financial assistance has been stopped since 01.04.2013 to old parks) and to the new parks?

Scheme for food parks had been implemented by the Ministry of Food Processing Industries during 8th to 10th Plan and discontinued with effect from 01.04.2007. However, financial assistance by the ministry to the food parks continued up to 31.03.2013 to the extent of committed liabilities out of the funds earmarked for mega food parks scheme. Out of the total 56 food parks sanctioned by the ministry, 47 food parks are operational and 9 food parks have been closed. Total available plots in these food parks are about 4,150 and about 1,100 food processing units have been commissioned out of more than 2,700 plots allotted as yet.

The scheme of food parks has been subsumed in the National Mission on Food Processing (NMFP) from April 1, 2012 for providing remaining portion of the grant for incomplete food parks by the State/UT governments. Therefore, the cost of completion of the existing food parks will be met out of allocation of NMFP by the State/UT governments.

Subsequently, in September 2008, the ministry introduced Scheme of Mega Food Park under its Infrastructure Development Scheme with objective to provide modern infrastructure for food processing industries in a demand driven manner with an effective supply chain management from farm gate to market. The scheme envisages a cluster-based approach and Hub and Spoke Model comprising of farm proximate facilities such as Collection Centres, Primary Processing Centres (PPC) linked with a Central Processing Centre (CPC).

For setting up Mega Food Parks, grant-in-aid is provided to the implementing agencies @50% of eligible project cost in general areas and @75% of eligible project cost in NE Region subject to a maximum of `50 crore per project.

Each project is expected to have around 30-35 food processing units with a collective investment of `250 crore that would eventually lead to annual turnover of about `450-500 crore and creation of direct and indirect employment to the extent of about 30,000 persons.

Government has sanctioned 42 Mega Food Parks out of which 21 projects have been accorded final approval and four projects have been accorded in-principle approval.

Three Mega Food Parks have already become operational. In Patanjali Food and Herbal Park, Haridwar (Uttarakhand), 17 units are currently in operation out of the total 25 plots available and in Srini Food Park, Chittoor (Andhra Pradesh) two units are currently in operation and five units are under construction out of 18 plots.

International Mega Food Park, Fazilka, Punjab, has allotted four plots and 10 SDF sheds to food processing units out of the total leasable area of 25 acres. Jangipur Bengal Mega Food Park, West Bengal, has also been able to lease out two plots to food processing units out of the total leasable area of 25 acres.

The common facilities and some of the primary processing units have become partially functional in Indus Mega Food Park, Khargone (Madhya Pradesh). Three other parks are likely to be completed soon.

To give further impetus to food processing sector in general and mega food parks in particular, a fund of `2,000 crore has been created in NABARD by the Central Government in the Union Budget 2014-15 for making available affordable credit to food processing units to be set up in the designated food parks. The fund will enable entrepreneurs to avail loan at cheaper interest rates for setting up food processing units. The modalities to operationalise this fund are being finalised.

Due to lack of proper guidelines, many global companies are not keen on investing in India in the areas such as warehousing and cold chain management. What incentives will your ministry be offering to investors to invest in India in setting up food parks?

It would not be appropriate to say that there is lack of proper guidelines for investing in warehousing and cold chain management. The Ministry of Food Processing Industries is operating a scheme for cold chain, value addition and preservation infrastructure with the objective of creation of uninterrupted cold chain infrastructure from the farm gate to the retail outlets.

The scheme envisages setting up of minimal processing-cum-collection centres also. The minimal processing centres may have facilities for sorting, grading, packaging, cutting, etc. It may also have pre-cooling and ripening chambers, cold storages, IQF, etc. The distribution hub served by multiple collection centres is normally the main location of the cold chain project.

The distribution hub may have facilities of cold storages, CA storage, primary chamber, etc. Minimal processing centres are supposed to be linked to the farm gate and to the distribution centre, which in turn, is linked to the retail point of sale. All these linkages are through refrigerated vans/reefer carriers/mobile pre-coolers.

Another unique feature of the cold chain scheme of MoFPI is that it also contains a separate component of irradiation wherein financial assistance is given for creation of irradiation facilities.

Under the scheme for Cold Chain, Value Addition and Preservation Infrastructure, the ministry provides financial assistance in the form of grant-in-aid @50% of the total cost of plant and machinery and technical civil works in general areas and 75% for North East region and difficult areas (North Eastern states, Sikkim, Jammu & Kashmir, Himachal Pradesh and Uttarakhand) subject to a maximum grant-in-aid of `10 crore per project. Even foreign companies wishing to set up cold chain project do not require any approval as FDI to the extent of 100% is allowed through the automatic route. 

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