Mega Food Park Scheme

• The government plans to set up 100 new cold chain projects at a cost of Rs. 12,000 crore to Rs.13,000 crore and has kicked off the process to invite investors to set up six new mega food parks, in a bid to boost farm sector incomes by establishing farm to fork linkages
• Rs.9,000 crore invested in new cold storage capacity in the past two years has reduced 10 per cent of the country’s food wastage

About Mega Food Parks Scheme(MFP):

• The Mega Food Park is an inclusive concept which is aimed at establishing direct linkages from the farm to processing and on to the consumer markets, through a network of collection centers and Processing Centers.
• The Mega Food Park have a Central Processing Centre (CPC) as the nuclei of all value addition activities facilitated byPrimary Processing Centre (PPC), which will act as point of aggregation and primary handling to provide ready to use raw materials to be processed further in the units to be set up in the CPC.
• The PPCs fed by field Collection Centres which will be the first point of contact with growers
• The collection centres is managed by local entrepreneurs will serve as farm level aggregation points for adjoining areas within a radius of about 10 Kms. The collection centres, while serving as the primary nodes for the Mega Food Park network will also enhance farm level value realization by providing direct market access to the farmers. Also it is expected that the collection centres will in course of time emerge as centres of rural commerce thereby spurring economic activity in the area.
• The primary processing centres is located near natural aggregation points will serve a number of collection centres lying in close proximity. The primary processing centres provides facilities for storage, sorting grading cleaning etc. Some of the PPCs may also house facilities for carrying out primary processing like pulping and juicing. Each primary processing centre have transportation facilities like refrigerated vans, trucks etc for transportation of goods from the collection centres and to the central processing centre. Storage facilities include all weather warehouses and cold storage / modified temperature storages wherever required.
• The Central Processing facility is an industrial park spread over an area of about 50 acres and house a number of processing units owned by different business houses.

Analysis:

• Mega food park scheme help in providing better prices to farmers, reduce wastage of perishables, add value to agricultural produce and create huge opportunities for entrepreneurship and employment for the youth.
• This scheme is facing some issues during execution. Land acquisition is a major issue while establishing mega food parks. It is very difficult to get 50 acre of land anywhere, particularly in small and hilly states. The government needs to provide flexibility to this requirement.
• Most agri-business in our country happens through cooperatives, their integration into food parks is critical.
• This scheme gives a grant to the SPV, the SPV finds itself unable to attract the PPCs and CCs. Here, the National Mission on Food Processing could play a major role by providing the Rs. 50 Lakh grant under that mission to units within the MFPs. But that scheme is now delinked from central support and states may have to decide if they want to continue or not. State governments may look into these issues case-by-case basis and provide attractions to these units as well.
• MFP scheme provides maximum grant of Rs.50 crores for setting up a MFP in minimum 50 acres of contiguous land with 50 percent contribution to the total project cost from the SPV. This “one size fits all” approach has not been able to attract the investors having more or less requirements.
• Scheme has not attracted global companies because some of them would not work on basis of “grant” from a developing country. They would like to work on Joint Ventures.
• Current status of Mega Food Park: The Centre's ambitious scheme of Mega Food Parks (MFP) in India is stumbling with some missing deadlines while others not meeting the basic purpose of project. In most cases, before launching the scheme no study was done on global best practices or on similar successful international parks or clusters. All the schemes stress on enhancing domestic capabilities of the Indian (Small and Medium-sized Enterprises (SMEs)) and only some emphasise of increasing India's share in international trade However, not much importance is given to linking India to the global value chain. The objective in schemes such as the MFP does not refer to increasing export or any form of global linkages. This is an area of concern especially since the Prime Minister has recently launched the 'Make in India' campaign, which focuses on attracting global investors to invest in India for domestic and global markets.
• Financial issues were found to be one of major reasons for incomplete projects.The most significant reason for delay is failure of MFPs in construction of Primary Processing Centres (PPCs). None of the operational MFPs had completely received the grant amount and most of them mentioned that this was because the PPCs and collection centres are yet to be operational. In order to create world class facilities, all the food parks have imported machineries from abroad which are expensive. Hence the rent or the lease amount for these facilities is also expected to be high. In some cases small and medium food processors said that they will not be able to afford these facilities. In case of PPCs, their economic viability also depends on the rental that they charge. Even if the PPC has a state of the art infrastructure the users may not be willing or may not have the ability to pay a high rental.
• Farmers usually opt for the facilities with lower rental. This, in turn, leads to the low usability of the PPC.

By: Vishal