Cabinet panel approves changes in mega food park infrastructure scheme

06 February 2014

The Cabinet Committee on Economic Affairs (CCEA) has approved modifications to the guidelines for infrastructure development of Mega Food Park Scheme for the setting up of food processing units.

These modifications are envisaged to streamline the implementation of the scheme while retaining its basic nature.

Under the revised guidelines, each mega food park is expected to benefit 6,000 farmers or producers directly and about 25,000 other farmers indirectly.

The estimated investment in common facilities in each project has been reduced to about Rs100 crore and will leverage an additional investment of about Rs250 crore while the expected annual turnover of each park has been set at Rs500 crore.

About 30 food processing units are expected to be set up in each project.

The Infrastructure Development Scheme for Mega Food Parks aims at providing modern infrastructure facilities for food processing industries along the value chain from farm to market.

According to the scheme, ownership and management of the Mega Food Park vests with a SPV in which organised retailers, processors, service providers etc may be the equity holders or there may be an anchor investor along with its ancillaries, associated companies and other stakeholders.

Farmer organisations were encouraged to participate in the SPV. In case, the government/government agencies become shareholders in the SPV, their equity will be restricted to a maximum 26 per cent to ensure the private character of the SPV.

The modification aims at changing the nature of the special purpose vehicle (SPV). The criteria of maximum 26 per cent equity by the state government, its entities or co-operatives has also been removed.

Anchor investor in the SPV holding majority stake, with or without other promoters of the SPV, will be required to set up at least one food processing unit in the park with an investment of not less than Rs10 crore.

However, state government or its entities and co-operatives applying for projects under the scheme will not be required to form a separate SPV and set up processing unit(s) in the Park.

These modifications are expected to trigger further investment in the food processing sector.

''The scheme will be implemented in a market driven manner commensurate with both global and national demands. Innovative supply chain management will be the key to its implementation. Project proposals for focusing on the processing and preservation of perishable food products will be given weightage in selection,'' the release said.

Technology mission
The CCEA also has approved the implementation of the National Mission on Agricultural Extension and Technology (NMAET) for the 12th Plan period. The extension of NMAET and its components will be expanded and up-scaled appropriately and implemented in a more coordinated and convergent manner.

The Mission will have a total outlay of Rs13,073.08 crore, with the government's share of Rs11,390.68 crore and state share of Rs1,682.40 crore.

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