Kriyaa Hi Vastoopahutaa Praseedati

Indian Economy, Questions, Uncategorized

OAS Mains Q&A: Mega Food Park Scheme-MFPS

Context

On 18thMarch, 2020, the Ministry of Food Processing Industries (MoFPI) sanctioned 37 mega food parks and 298 integrated cold chain projects throughout the country to fill in the gaps across the value chain and establishing the cold chain grid.

The MoFPI is focusing on building cold chain infrastructure across the country, for seamless transfer of perishables from production to consumption through the Pradhan Mantri Kisan Sampada Yojana (PMKSY).

Question

What is Mega Food Park Scheme? Discuss it advantages and issues associated with with.

Sample Answer

MFPS is the flagship program of the Ministry of Food Processing Industries which proposes a demand driven/pre-marketed model with strong backward/forward linkages and sustainable supply chain.

It is based on “Cluster” approach and envisages creation of state of art support infrastructure in a well-defined agri-horticultural zone for setting up of modern
food processing units with well-established supply chain.

It is implemented by a Special Purpose Vehicle (SPV) which is a Body Corporate registered under the Companies Act.

Advantages

  1. Modern infrastructure for food processing at the park would benefit the farmers, growers, processors and consumers immensely and prove to be a big boost to the growth of the food processing sector in the country.
  2. Benefit to local population through full/partial direct and indirect employment generation.
  3. New employment opportunities within rural areas which will reduce rural-urban migration, unplanned urbanisation, slums/social problems in cities.
  4. Provide efficient supply chain management from farm gate to retail outlet.
  5. Eliminate or reduce the layers of the middle-men, training and technology transfer.
  6. Farmers can utilise the cold storages, ripening chambers, and warehouses. So, less wastage of products and no distress sales, leading to higher income.
  7. Benefit to Industry by helping in value addition by providing modern common infrastructure facilities, induction of advanced technology and exporting opportunities.
  8. Benefit to traders through increase in product range and better quality and to consumers through availability of better products at lesser price.

Issues with Mega Food Parks

Land Acquisition Issues

  • Like most other infrastructure projects, the key challenge in setting up food parks lies in land acquisition.
  • Most of the projects have failed to take off mainly because of the bottlenecks involved in land acquisition.

Financial Issues

  • Financial issues are found to be one of major reasons for incomplete Mega Food Park projects.
  • One of the main reasons has been the failure of the promoters in raising finance for the MFPs as they have difficulties in convincing the banks about the new concept and hence failed to secure loans required for mounting the projects.
  • The other challenge is the inability to attract the right set of tenants, basically, manufacturers and ancillary players, who can come forward and set up base in a food park.

Governance Issues

  • Often, projects get delayed due to non-approvals and in coordination with various state agencies.
  • For examples, it took both Jharkhand Mega Food Park Private Limited and India Mega Food Park Private Limited, 36 months to get permission for sub-leasing of land and Satara Mega Food Park Private Limited (Maharashtra) and International Mega Food Park Limited reported facing issues in getting environmental clearance from the state.
  • Even though single window facility exists in almost all states, yet they failed to provide timely and holistic clearances.
  • For example, Integrated Food Park Private Limited (Karnataka) had to approach multiple departments to get respective approvals and clearances in-spite of
    presence of fast track single window clearance agency.

Last Line to Say

The announcement of mega food parks and integrated cold chains is an opportunity to improve the farm to fork ecosystem and must be made a success by mitigating the systemic challenges like land acquisitions issues, credit-facility etc on a war footing.

Print Friendly, PDF & Email
%d bloggers like this: