FNB News - Mega food parks' scheme is mega flop yet ministry makes new park plans

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Mega food parks' scheme is mega flop yet ministry makes new park plans

Tuesday, 04 November, 2014, 08 : 00 AM [IST]

Abhitash Singh, Mumbai

Even after six years of its commencement, ministry of food processing industries' (MoFPI) much-touted mega food parks scheme, in spite of the incentives, subsidies and sops on offer, is yet to take off, as only three mega food parks are operational in the country right now.

MoFPI, in the year 2008, came up with a huge plan of setting up 40 mega food parks in 23 states to provide remunerative prices to farmers, reduce wastage of agricultural produce, build capacity of producers and processors and create efficient supply chain from farm to market. But the scheme failed to deliver what it promised.

As part of the scheme, the ministry had embarked on a plan to set up three mega food parks in Andhra Pradesh, five in Maharashtra, three in Bihar and Gujarat, two each in Chhattisgarh, Haryana, Himachal Pradesh, Orissa, Uttar Pradesh, Uttarakhand and West Bengal and one each in Assam, Jharkhand, Karnataka, Jammu & Kashmir, Madhya Pradesh, Mizoram, Puducherry, Punjab, Rajasthan, Sikkim, Tamil Nadu and Tripura. But as of now only three mega food parks - one each in Andhra Pradesh, Karnataka and Uttarakhand are operational and rest all are at various stages of implementation.

Among those which are operational are Patanjali Food Park in Uttarakhand, Future Group's Integrated Food Park in Karnataka, and Srini Food Park located at Chittoor, Andhra Pradesh. While Patanjali is known for its non-commercial avatar and Tumkur is a recent addition, AP's Srini, which could have been counted as a profitable entity that has been in operation for sometime now, has also not recorded noteworthy response.

A senior official from Srini Food Park Pvt Ltd, Andhra Pradesh, on the condition of anonymity, revealed, “This mega food park was established in a sprawling 147 acre space to facilitate the food processing sector with beneficial forward and backward linkages. But as of now, only 4-5 processing units have been set up here since its inception. Investors are not coming ahead to start food processing units because they have to go from pillar to post for the documentation, which is time-consuming for them. MoFPI should establish a single window system to facilitate the investors who are keen on establishing food processing units.”

Interestingly, in spite of the dismal show, the ministry seems to be unperturbed. Recently at an event held in Mumbai, Union minister for food processing Harsimrat Kaur Badal announced to set up three more mega food parks in the country during the next six months with each project attracting an investment of Rs 400 crore to Rs 500 crore.

In this regard, speaking to FnB News, Siraj Hussain, secretary, MoFPI, explained, “The three mega food parks project which are expected to come up in Punjab, West Bengal, and Madhya Pradesh will generate employment for about 30,000 persons and maximum grant admissible from government for a mega food park is Rs 50 crore. Already three food parks are in operation - Patanjali in Uttarakhand, Chittoor in Andhra Pradesh and Tumkur in Karnataka. The three parks which are coming up now will have 25-30 units each with an expected investment of Rs 400 crore to Rs 500 crore.”

Hussain added, “Since the food processing sector has registered a growth of around 8.6 per cent in the last 10 years, at a much higher rate as compared to agriculture and manufacturing, mega food parks will help more in the growth of this sector,” but admitted, “Many food parks are at various stage of implementation. The reason for food parks not coming up on time is that the project gets bit delayed as difficulties are being faced in getting land for the project and some approvals from the state government.”

Though Husain is open, J P Meena, additional secretary, MoFPI, refuses to admit to the scheme's failure. Putting up a weak defence, he stated, “MoFPI is taking up various steps in order to boost the investment by both MNCs and Indian companies. There are more than 19 food processing units at Uttarakhand Patanjali mega food park and it has an annual turnover of Rs 500 crore while Srini mega food park in Andhra Pradesh has around six food processing units with an annual turnover of Rs 150 crore. The newly opened mega food park at Tumkur in Karnataka, which was inaugurated by prime minister Narendra Modi on September 24, 2014, was seeing investment by medium-sized food processing companies in starting food processing units.”

Meanwhile, Manish Chandra, owner, M K Industries, Bihar, throws light on the fate of the remaining projects that are yet to take off. He pointed out, “The ministry of food processing has approved three mega food parks in Bihar in the year 2011, 2012 and 2013 but as of now not even a single food park is operational in the state. Even though the Centre is giving a subsidy of 25 to 30 per cent for setting up of units in the mega food parks, investors are not showing interest. Companies like Keventer, Pristine Logistics, Infraprojects Pvt Ltd and JVL Mega Food Park Pvt Ltd were showing interest in setting up these food parks but till now no concrete development took place.”

Offering further insight, Vijaykumar Chole, assistant vice-president, Mitcon Consultancy and Engineering Services Ltd, stated, “The mega food park scheme which was supposed to be a boom for the food processing sector really seemed to be a failure because of no proper planning for execution. During the initial stage of planning, it was expected that on an average each project may have around 30-35 food processing units with collective investment of around Rs 250 crore that would eventually lead to an annual turnover of Rs 450-500 crore and also create direct and indirect employment of 30,000 persons, but the criteria have not yet been met due to the lacklustre approach by the government.”

He added, on a concluding note, “This mega food parks model may not be a viable. A proper mentorship should be there for all those who will be establishing units in the park. Since many investors were not knowing the fate of the projects they shied away from this mega project. The MoFPI, instead of establishing big mega food parks, should come up with small food parks in every state.”