25.11.08

Mega Food Parks

The Centre has received expression of interest (EoI) from 40 applicants to set up 10 mega food parks (MFPs) at a combined cost of Rs 2,500 crore. Ashok Sinha, secretary of MoFPI said the government has decided to set up 30 greenfield MFPs during the Eleventh Plan, each park with an investment of Rs 250 crore. In the first phase, he said the MFPs would be established in ten states. He indicated that a few corporate firms involved in logistic management, retail and food export business are also part of applicants. .The EoIs will be appraised by a Programme Management Agency (PMA) appointed by the ministry and later scrutinised by a technical committee and based on which in-principle approval will be accorded by an Inter-Ministerial Approval Committee (AC) within two months time. “The scrutinised applicants would be asked to submit Detailed Project Reports (DPRs) soon,” Sinha added.Infact,a projectspecific Special Purpose Vehicle (SPV), promoted by a group of stakeholders related to food processing industry including financial institutions/banks, retailers, processors and producers will be responsible for the establishment, ownership and maintenance of each MFPs. He said,"Such SPV will be eligible to receive capital grant support from the government to the extent of 50% of the project cost not exceeding Rs 50 crore per park in general areas and 75% of the project cost not exceeding Rs 50 crore in difficult area.
The difficult area is classified as North East region including Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarkhand and Integrated Tribal Development Programme (ITDP). The SPV’s stake should be atleast 20% of the project cost. Currently the government has received EoIs to set up MFPs in Punjab (Ludhiana-Jallandhar), Jharkhand (Ranchi), NorthEastRegion(Guwahati), West Bengal (Jangipur), Uttar Pradesh (Rae Bareilly), Uttarkhand (Hardwar), Tamil Nadu (Dharmapuri), Karnataka (Mandya), Maharashtra (Pune-Satara) and Andhra Pradesh(Chittoor).
Of the proposed total 30 MFPs, he said the ministry has planned to start work on 10 MFPs in the current financial year. The primary objective of the MFPs is to provide adequate infrastructure facilities for food processing along the value chain from the farm to market. Each project could commence its operations in 24 months.
The MFP scheme is part of action taken by the food processing ministry to achieve its target to raise the processing of perishables in the country from the existing 6% to 20%, value addition from 20% to 35% and the share in global trade from 1.5% to 3% by the year 2015.On an average, each project covering about 50-100 acres will have around 3035 food processing units with a collective investment of Rs 250 crore that would lead to annual turnover of about Rs 450-500 crore and creation of around 40,000 direct and indirect jobs.
The food processing industry in India is growing when the world faced economic recession. He said the industry is currently growing at 14% compared to 6-7% growth in 2003-04.Foreign Direct Investments (FDIs) to the tune of 106.4 million euros pumped into the food processing industry in 2007-08 compared to 4.2 million euros in the previous fiscal.The MFPs will widen the opportunity for investors in the Indian food processing sector, he said. With the organized retail players expanding footprints across the country, he said the food processing sector has a great opportunity.

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