Government puts new AEZ proposals on the backburner

04 Jan 2007

Mumbai: The government has decided put proposals for setting up new agriculture export zones (AEZs) on hold and would ask state governments to reconsider all pending proposals with them. The government has also received 34 fresh proposals for setting up AEZs.

Instead, the central government proposes to strengthen existing AEZs. The government would make exceptions only if there are "strong and compelling" reasons, sources said.

"The state governments have been asked to reconsider the proposals in the light of the decision," government officials said.

The government has sanctioned 60 AEZs since the formulation of the policy in 2001. However, they have failed to evolve in a significant way even after five years of existence.

AEZs are agro climatic zones specialising in particular products spread over an area of a district. The decision to put an embargo on new AEZs was taken after a "peer" evaluation of existing ones.

The main exports from the AEZs are foodgrains, nuts and seeds, meat, poultry and dairy products, processed foods, tobacco, tea and coffee. Exports from the AEZs aggregate to almost $9 billion, but their contribution remains much below expectations.

While the government has decided not to sanction any more AEZs, it is not willing to put a cap on the number of SEZs despite strong opposition, particularly from its left allies.