MEGA FOOD PARKS IN INDIA
The Indian food market is set to more than double by 2025. The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1 per cent. In India, the food processing industry is one of the largest in terms of production, consumption and export prospects. Mega Food Parks Scheme (MFPS) is a programme of the Ministry of Food Processing Industry, Government of India, introduced in the eleventh five year plan. The primary objective of the MFPS is to provide adequate infrastructure facilities for food processing along with the value chain from the farm to market. It will include creation of infrastructure near the farm, transportation, logistics and centralized processing centers. The main feature of the scheme is the cluster based approach. The scheme will be demand driven, pre-marketed and would facilitate food processing units to meet environmental, safety and social standards. The outcome will be increased realization for farmers, creation of high quality rural processing, reduction in wastage, capacity building of the producers, and creation of efficient supply chain along with the significant direct and indirect employment generation.
Though the Ministry of Food Processing Industry (MFPI) has supported development of 54 Food Parks in the country during tenth year plan, most of them are yet to be established. Against a physical target of 25 Parks during the 10th Plan, 18 Parks have been sanctioned so far. Of these, only 8 Food Parks have been established.Those established are facing problems of gross under utilization, besides being unable to attract entrepreneurs. Only 28 units are currently in operation in these 8 Parks.Ministry of Food Processing Industries had commissioned reputed external agencies to carry out diagnostic study cum evaluations of the Food Park scheme. The findings point out that the State Industrial Development Corporations or PSUs implement the scheme in the traditional industrial estate mode with unsustainable management and implementation arrangements. This has resulted in valuable real estate being acquired but utilized at low levels of efficiency. The scope for commercial development of these locations for promotion of the food processing industry is yet to be utilised. Major reasons for the poor functioning of parks are Location and site related problems including high cost and unsuitability of locations,delay in providing basic infrastructure facilities like power, water, road , Poor management and implementation capabilities, Absence of strong backward linkages,weak linkages with the market The evaluation also suggested that the park will be successful only if infrastructure for On
Farm Storage, Primary Processing , Minimal Processing, Retail Outlet, Mobile Processing Unit ,Mobile Pre-cooling Unit, Packaging Centre etc. are provided on a cluster basis, without insisting on all common facilities to be provided within the acquired area of the Park.
SALIENT FEATURES OF MFPS
1. The scheme aims at facilitating and establishment of a vibrant food processing industry supported by an efficient supply chain management which would include collection centers, primary processing centers and cold storage infrastructure. The land area required would be ranging between 50 – 100 acres subject to a variation on various factors and regional elements. The scheme aims at establishing of 30-40 food processing units with collective investments of Rs. 250 crores.
2. The scheme envisages a one time capital grant of 50% of the project cost (excluding land cost) subject to a maximum of Rs. 50 crores in general areas and 75% of the project cost in difficult and hilly areas i.e. North East Region including Sikkim, J&K, Himachal Pradesh, Uttarakhand and ITDP notified areas of the states.
3. The project of MFPS would include core processing facilities such as farm proximate collection centers, primary processing centers, grading sorting and packing facilities, cold storage facilities, testing laboratories, cleaning, grading, sorting, packing facilities, food incubation and preservation centers, factory buildings, etc. This is not however exhaustive and indicative, because of the unique requirements of each MFPS.
4. The scheme will be implemented on PPP mode.SPV involving stakeholders to manage the Park, private entrepreneurs will be holding a minimum of 51% equity.Project Management Agency (PM) will offer & handhold from concept to commissioning. There will be no restriction on the number of units, however restriction can be on the quantity of material to be handled. An SPV shall be body corporate registered under the Indian companies Act, 1956 with three entrepreneurs which shall be independent of each other. In each SPV Atleast 26% of equity should be held by food processor(s) within the SPV. The combined net worth of the shareholder of the SPV should not be less than Rs. 50 crores with food processors having atleast Rs. 10 crores of net worth. The SPV shall be under obligation to bring in atleast 20% of the project cost including the cost of land as their contribution. Government agencies can also become member of the SPV subject to maximum stake of 26%.
5. The ministry of Food Processing would engage a programme management agency (PMA) to provide, management, consultancy, project management and monitoring support. For this purpose a monetary support to the extent of 5 % shall be provided to such PMA. PMA will assist in implementation of the scheme. The PMA shall be a reputed institution with extensive experience in project development, management financing and implementation of cluster infrastructure projects.
6. The implementation process shall be carried out with the assistance of a special purpose vehicle (SPV). SPV will be fully responsible for execution ownership and management of the MFPS along with the support of financial institutions/banks, organized retailers, processors, service providers, framer organization and other related stake holders as equity holders of the SPV. In other words, SPV shall act as an implementation agency subject to certain eligibility conditions.
7. SPV shall be responsible for the formulation of the detailed project, and its execution in a timely, transparent and efficient manner. Further, they are under obligation to procure land, setup of external infrastructure, obtaining statutory approvals including environmental clearance and to receive and utilize the funds under the scheme in most transparent and judicious manner.
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