Centre softens norms to boost investment in food processing

 The Dollar Business Bureau In an effort to boost investment in the food processing sector, the government has introduced some changes in its guidelines of the Mega Food Park scheme. The changes in guidelines, approved by the cabinet committee on economic affairs (CCEA), will streamline the setting up of modern food processing plants across the state. These modifications are expected to trigger further investment in the food processing sector and ensure smooth implementation of the Mega Food Parks scheme particularly, the projects that are at initial stages, a government statement said on Thursday. In March, the Centre had allocated the development of 17 Mega Food Parks across the country to at least 10 private companies and state governments. In 2008-09, the government had planned to set up 42 food parks, each spreading over 30-50 acres of land. The move was aimed at bringing food processors, farmers, retailers and exporters at one platform. Of the 42 parks allocated in the first phase, work on 17 proposed facilities could not take off. Among the 10 private players, Adani Ports and Special Economic Zone, Jain Agro Trading Company and Ruchi Acroni Industries from the Ruchi Group were granted rights to develop mega food parks. The scheme is expected to attract investment of up to Rs 6,000 crore out of which the government will contribute Rs 850 crore. After the changes in guidelines, the scheme will bring the Centre at part with the state government agencies. “The modification will also bring central government agencies on par with the state government agencies by removing the restriction of a maximum 26 percent on their equity holding in the Special Purpose Vehicle (SPV),” the statement said. The scheme will be implemented in a market driven manner commensurate with both global and national demands. While innovative supply chain management will be the key to implementation of this scheme, projects related to processing and preservation of perishable food products will be given weightage in selection. Each Mega Food Park is expected to benefit 6,000 farmers/ producers directly and about 25,000 farmers indirectly. The estimated investment in each project is about Rs 100 crore in common facilities and it will leverage an additional investment of about Rs 250 crore, the statement said, adding that the turnover of each project is expected to be to the tune of Rs 500 crore.    

May 7, 2015 | 2:17 pm IST.