Earlier, the project was caught in a web of technical complications regarding the land lease. Under the UPSIDC by-laws, only two land leases could be issued. Holding the first lease itself, the second sub-lease for the MFP land was with ABNL. However, according to the Central government rules for setting up the MFP, land holdings must be in the names of the individual processing units. Since ABNL could not further lease this land to individual units, UPSIDC decided to sell additional land adjacent to the existing MFP to ABNL, allowing it to hold the first lease and issue subleases to individual processing units.
The mega food park is expected to leverage UP’s position as a leading supplier of raw materials — wheat, sugar, potato, milk and livestock — in agriculture. The scheme is expected to raise India’s processing of perishables from the existing 6% to 20%, value addition from 20% to 35% and the share in global food trade from 1.5% to 3% by 2015. In this light, the current project is expected to tap into UP’s potential by developing the value chain from the farm to the market.
According to ABNL’s existing proposal, the Central Processing Centre (CPC) will be set up at Jagdishpur, with primary processing centres at Sultanpur city, Faizabad, Rae Bareli, Barabanki, Lucknow, Pratapgarh, Ambedkar Nagar and Jaunpur.
With UPSIDC allowing ABNL to sublet the land, ABNL will now have 72 acres of land transferred to it from Indo Gulf Fertilisers to the Special Purpose Vehicle (SPV) floated for setting up the MFP. Though the company had, in its initial proposal, proposed to hold 94% equity in the SPV to be floated for the MFP, it has, subsequently, agreed to keep its equity at a maximum of 74%, as desired by the government.
• The Mega Food Park Scheme is expected to raise processing of perishables in the country from existing 6% to 20%, value addition from 20% to 35% and share in global food trade from 1.5% to 3% by 2015
• The scheme aims to provide excellent infrastructure — transportation, logistics, centralised processing centres, effective supply chain, processing, packaging and environment protection systems, quality control laboratories and trade facilitation centres
• Between 50 to 100 acre land holdings will be set aside for setting up Central Processing Centres. Addition land will be needed for Primary Processing Centres and Collection Centres. Each project is expected to have around 30 to 35 food processing units with a collective investment of Rs 250 crore. Eventual annual turnover is expected to be between Rs 450 and Rs 500 crore.
• Pattern of assistance for MFP: One time capital grant of 50% of project cost (excluding land cost) subject to a maximum Rs 50 crore
• MFPs will be run by Special Purpose Vehicles (SPVs), each of which will have at least 3 entrepreneurs or business units which will be independent of each other, and with no common directors
• At least 26% of the equity of SPVs must necessarily be held by food processors within SPVs