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Food industry in Karnataka sees concept of food parks losing relevance
Tuesday, 23 September, 2014, 08 : 00 AM [IST]
Nandita Vijay, Bengaluru
The six food parks approved by the government of Karnataka have not taken off as expected. According to experts, the primary reason is the lack of synergy between agriculture and food processing industries. They added that Future Group’s India Food Park, which would be commissioned on September 24, 2014, could take off because of the promoter’s familiarity in food processing and retailing.

In 2007, the state government had announced that six agro food parks would come up at an outlay of approximately Rs 110 crore. Each park was estimated to cost between Rs 17 crore and Rs 20 crore.

For the project Food Karnataka Limited, a government of Karnataka undertaking was the project facilitator, with the Central and state governments also providing funds. The park identified at Malur in Kolar district was promoted by Innova Agri Bio Park Ltd. at a cost of Rs 17- 20 crore; the one in Jewargi in Bagalkot, promoted by Jewargi Agro Food Park Ltd., was a joint venture of Rayalseema Concrete Sleepers Pvt Ltd of S S Patil Group and cost Rs 17.93 crore, and the one in Kangrali in Belgaum was promoted by Belgaum International Agro Food Park Ltd at a cost of Rs 18.69 crore.

The Maddur food park, which is in Mandya, was promoted by Golden Harvest Food Parks Ltd at a cost of Rs. 18 crore. The one in Hiriyur in Chitradurga was promoted by Akshay Food Park at a cost of Rs 16.39 crore, and the one Bagalkot is promoted by Green Food Park at a cost of Rs. 19 crore. However, many of these are yet to take off.

“Karnataka is known for its six agro climatic zones and nine distinct soil types. It is the only state where most varieties of fruits are grown. It accounts for 70 per cent of India’s coffee, is the largest producer of spices, aromatic and medicinal crops and is the second largest milk producing state after Gujarat,” said the Karnataka State Agricultural Produce Processing and Export Corporation Ltd (KAPPEC).

“Food park developers are keener to lure investors using the so-called under-one-roof approach, which is seen to lose significance because of bottlenecks in its implementation. The state is bogged down by a serious power shortage, land acquisition issues, and tardy project approvals, which, in future, could hamper development prospects,” said a section of food entrepreneurs.

“The biggest challenges are clearly the infrastructure, and the inability to take the food entrepreneurs into confidence, which is a depiction of an industry-unfriendly approach,” stated Chetan L Hanchate, chief executive officer, Centre for Processed Foods (CPF), Bengaluru, and president, Bengaluru chapter, Association of Food Scientists and Technologists of India (AFSTI).

“The cluster-based approach near the farms was to enable the speedy transportation of fresh produce for processing, efficient logistics and centralised processing centres. But none of these are visible. There are no roads, power, water or even basic amenities in the vicinity. CPF, too, was invited to be on the board of the food parks’ initiative in Karnataka, but deferred its plans,” he added.

Arabind Das, chief operating officer, Godrej Tyson Foods, said, “The government would need to usher in strong measures to provide the much-needed impetus for the growth of food processing sector by effecting an uniformity in tax structure, beef up investments in technology for the farm and food processing sectors, and modernise cold chain logistics infrastructure.”

Airing similar views were officials from the Central Food Technological Research Institute (CFTRI) and the Defence Food Research Laboratory (DFRL), who pointed out that food parks could spur a transformation. Mysore is also to have a nutraceutical park on 2.5 acres of land belonging to CFTRI at M G Halli near Kalidasa Road.

The reality is that large food players opt for their own facilities and medium and small industries too prefer the same which they view would enable faster commissioning. This is where even Maiyas and MTR have gone to set up their own manufacturing units to garner a share of the growing food processing market valued at $258 billion by 2015 by the Federation of Indian Chambers of Commerce and Industry and EY’s (FICCI-EY) report.

Dr V Prakash, former director, CFTRI, pointed out that while there were efforts by the state government to set up the park, there was a need for total support in terms of finance and supervision of timelines in competition. According to the state government, the Indian food processing industry was on the verge of a transformation from a low level of processing to one that was likely to spur its recognition in the international markets.
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