[Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes

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IAS Mock Interviews
  1. Problems with government schemes
  2. 12th FYP: food processing
  3. Ministry of Food Processing Industries (MoFPI)
    1. Vision 2015 Food processing
    2. National Mission on Food Processing (NMFP)
    3. #1: Mega Food Parks:
      1. Hub and Spoke Model
      2. Location Factors: Bhagalpur and Chittor
      3. Benefits of Each Mega Food park
    4. #2: Cold Chain infra
    5. #3: Abattoir modernization
    6. MoFPI: Misc. Schemes
  4. National Policy on Handling and Storage of Foodgrains
  5. PEG scheme
  6. FCI reforms
  7. Gramin Bhandaran Yojana
  8. National Horticulture Mission (NHM)
    1. Terminal market complexes (TMC)
    2. National Horticulture Board (NHB)
  9. National Centre for Cold Chain Development (NCCD)
  10. Scheme for Agri Market
  11. Agmarknet
  12. Dairy Schemes
    1. National Dairy Plan (NDP)
  13. Agro Export zones (AEZ)
    1. AEZ: Problems
    2. Export credit schemes
  14. Misc. Bodies
    1. Export related
    2. Boards
    3. Research/Education related

In the previous article, we saw the basic details related to food processing industry. Click me if you didn’t. Time to dive into government schemes, policies, plans.

Problems with government schemes

  1. Agriculture is a State subject. No scheme can be successful without coherence between the Centre and States in policies and strategies. But we have plethora of bodies and departments @center and state level=empires within empires. Even Left hand doesn’t know what right hand is doing. Problem is compounded when ruling parties are different at state and center level.
  2. Most schemes have Low ceiling (they just give a few lakh rupees) + as plant size increases, the MSME tax benefits decrease. So, food-entrepreneur setups two small plants using money two schemes, rather than one big plant. Smaller the plant=>poor economies of scale=>high production cost, can’t invest in marketing-research, innovation, export quality products.
  3. These Subsidies/grants are “back-ended” (meaning ca$H is not given before you start the project, but only after the project is completed or in final stage)
  4. But Parameters of project approval/ file-Processing= non-transparent (just like our UPSC). Timely clearance of project files=nope. Sometimes they don’t even give reasons for rejecting project. Food-Entrepreneur is unsure whether bureaucrats will approve his file or not (+bribe demand)
  5. Significant time lags from the date of application for financial assistance, to release of funds= affects the project schedule= cost overruns for the investor.
  6. Most schemes seek to get investors to pump money in certain infrastructure without providing the necessary support for the utilization of the infrastructure. (e.g. asking pvt player to setup cold storage, without guaranteeing continuous electricity supply).
  7. Overenthusiasm =Excess capacity. Example: many tax-benefits given to groundnut oil refining industry=new units keep popping up even when groundnut cultivation is not sufficient to provide raw material to all refineries. Result: No unit runs on full capacity, industrial sickness, loan defaults, NPA.
  8. Inputs of Panchayati raj institution, cottage industries, local entrepreneurs are considered irrelevant in scheme design.
  9. Lack of focus/financing for freezer cabinets in retail outlets/kirana stores, vending machines for tea/coffee/beverages.
  10. Working capital requirements are high for food processing industry (thanks so many intermediaries, electricity, high duties on imported chemicals etc.) But these schemes only give money for initial project/machines. Don’t provide support for working capital (i.e. cost of day to day operations, buying raw material, electricity-utility bills etc.)

Solution: Integrate all schemes offered by various Ministries and allied agencies.

After years of stupidity and badass thuggary, finally they woke up during 12th Five year plan drafting. Now they’re converging various schemes of Horticulture board, Agriculture ministry, Food processing ministry and Commerce ministry under the National Mission on food processing. ok, better late than never but even small time players like Thailand and Vietnam have reformed before we did. So they’re already ahead in the race of capturing export market. Anyways, lets check various plans, missions, schemes.

12th FYP: food processing

Starting with some (stupid) numbers:

work12th FYP projection (crores)
Horticulture developmentmore than 50,000 cr.
post-harvest management + cold storagesmore than 7000 cr.
food processingmore than 15000 cr. (in 11th FYP this was barely 4000 crores)

12th FYP wants following:

overall
  1. Develop the food processing sector to reduce food inflation and food wastage
  2. Create 1 million additional jobs during the Twelfth plan period in the food processing sector
Schemes
  1. Set up National Mission on Food Processing with State governments’ involvement
  2. Integrate of various ongoing schemes for horticulture development (NHM, HMNEHA, NHB, CDB, NMMI and NBM) into one Integrated National Horticulture Mission
  3. Setup 120 integrated cold chain projects, of which 20 projects would be of irradiation facilities.
  4. Existing infrastructure development schemes – Mega Food Parks Scheme, Integrated Cold Chain Scheme= Expand and modify them.
Finance
  1. Setup of Innovation Fund and Venture Capital Fund to promote innovations and technology development in Food Processing.
Fancy Things
  1. Knowledge sharing and  HRD via
    1. National Institute of Food Technology Entrepreneurship and Management (NIFTEM),
    2. Central Food Technology Research Institute (CFTRI)
Export
  1. Harmonise Indian Food Standards with International Codex standards.

Ministry of Food Processing Industries (MoFPI)

Side note: The new Mains syllabus contains Ministries and Departments of the Government so, in that context, while we’re doing the food processing, better prepare this ministry’s functions as well:

Functions of MoFPI

  1. Launch National Mission on Food Processing
  2. R&D in food processing, Specialized packaging for food processing industries, Technical assistance and advice to food processing industry
  3. Enhance Processing level and reduction in wastages
  4. Food Safety & Quality assurance
  5. Financial assistance, grant-in-aids, tariff issues related to
    • Fruits and vegetable, Food grain milling industry,
    • Dairy products, poultry, eggs, meat, Fish processing
    • Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery, other ready to eat food products
    • Alcoholic drinks, beer, Aerated waters / soft drinks and other processed foods
  6. strengthen institutions such as
    • National Institute for Food Technology and Entrepreneurship Management (NIFTEM)
    • Indian Institute of Crop Processing Technology (IICPT)
    • Indian Grape Processing Board (IGPB)
    • National Meat & Poultry Processing Board (NMPPB)

MoFPI is responsible to 2 fancy missions +3 (bogus) schemes & given ~700 crores in 2013’s budget.

2 fancy missions3 schemes
  1. Vision 2015 for food processing
  2. National Mision on food processing
  1. mega food parks
  2. modernization of abattoirs (slaughterhouses)
  3. cold chain infrastructure

+ some chillar schemes for HRD, R&D.

Let’s see their salient features:

Vision 2015 Food processing

  • by Ministry of Food processing
  • adopted In 2005
What?targets by 2015
processing perishable food produce20%
value addition to food produce35
India’s share in global food trade3%
investment100 thousand crore

This vision2015 document was prepared by Rabo India Finance ltd. It talks about individual sectors (dairy, meat, tea, coffee etc.) We’ll see those points later during articles on individual sector.

National Mission on Food Processing (NMFP)

  • Launched under 12th Five year plan.
  • for decentralized implementation of various schemes under Ministry of Food processing with help of state governments.

Contribution ratio:

Centrestate
North East9010
Except North East7525

Will do following:

  1. increase agricultural productivity
  2. increase farmers income
  3. Help state governments to create synergy between their agricultural plans vs. food processing sector.
  4. Help state governments in institutional and infrastructural gaps
  5. Create efficient Supply Chains for agricultural produces.
  6. Skill development, training and entrepreneurship for both post-harvest management and food processing industry.
  7. Give capital/technology/skill to MSMEs so they can setup/modernize food processing units
  8. Help food processing industry to meet quality /food safety standards for both desi and foreign markets.

This national food processing mission has following schemes:

  1. Technology Up-gradation / Setting up / Modernization / Expansion of Food Processing Industries
  2. cold chain facilities for Non-Horticultural produces and Reefer Vehicles
  3. Primary Processing Centres/Collection Centres in rural areas
  4. Modernization of Abattoirs
  5. Modernization of Meat Shops
  6. Human Resource Development (HRD)
  7. Promotional Activities
  8. Up-gradation of Quality of Street Food

National Food Processing Development Council (NFPDC)

functionprovide guidance to all schemes of Ministry of Food Processing including above national mission on food processing.
composition
  • Chairman: Sharad Pawar, the b0$$ of both Agri and Food processing ministries.
  • representatives of State Governments
  • related Govt. departments
  • Industry associations

^this is ~200 words. From UPSC point of view, the Aukaat of NMFP is not beyond 15 marks questions on ‘salient features’. Hence not covering any further. Moving to the three schemes

#1: Mega Food Parks:

Mega food parks will be setup in 12th Five year plan. Government allotted more than 1700 crores for it.

  • First, a Special Purpose Vehicle (SPV) will be created to setup the Mega Food Park.
  • So, What is this special purpose vehicle, does it look like Tata Sumo or Tata safari? Long thing cut short: you’re aware of debt vs equity. SPV = a limited company setup with money from farmers’ associations, private players, financial institutions, state level agencies etc. (meaning they’re are equity holders)
  • Then Government will give them grant to cover **% of project cost. Thus Food Park is setup and everyone benefits.

Financial assistance for mega Food Park:

AreaGovernment gives grant: __ % of the project cost
General50
North East, Hill area, areas under integrated Tribal development plan75
  • Maximum of Rs 50 crore per project.
  • Land cost not included in project cost.

Facilities @Mega Food park

Core Infrastructure Facilities
  • Weighing bridge, cleaning,
  • grading, sorting, packing,
  • dry and temperature controlled warehouses, ripening chambers, reefer vans etc.
Non-Core Facilities
  • administrative buildings, conference room
  • internet-wifi connectivity for download mp3, movies and games.
  • training centres,
  • trade centre/display centres, marketing support system etc
  • workers hostels, canteen, guesthouses
Common Facilities
  • bore well, overhead tank, water treatment plant
  • sorting, grading, packing, specialized and dry warehouses,
  • irradiation facilities
  • testing laboratory, stems sterilization units, food incubation cum development centers
  • Post office, ATM, Bank branches
Basic Infrastructure
  • road-road connectivity
  • drainage, sewage, water supply, effluent treatment
  • electricity, telecom-internet
  • parking bays
Services
  • hiring of domain consultants for preparation of DPRs,
  • supply chain management, logistics

Hub and Spoke Model

Mega food parks are based on the “hub and spoke” model. So what is this Hub and Spoke model?

chart hub-spoke model Mega food park

Imagine a bicycle wheel: it has a strong central hub with a series of connecting spokes. Thus we have

  • One Central Processing Centre (CPC) as the hub
  • Multiple Primary Processing Centres (PPC) that supply raw material to the hub
Three Tiers:What?
SHG
  • A self-help Group of 10-20 farmers.
  • They aggregate fruits/veggies produced by member-farmers @village level.
Field collection Center
  • Society or association of 10-20 self-help groups (SHG)
  • They provide basic minimum facilities for post-harvest management= washing, fumigation.
  • Supply of inputs: seeds, fertilizers etc and information via internet kiosks.
Primary Processing Center (PPC)
  • made up of 10-20 field collection centers.
  • These PPCs do the primary processing viz. sorting, grading, packing of raw material and ensure regular supply of raw materials to the food industries in the central processing center (CPC) of the Mega Food park.

^ Similar concept for eggs and milk. click the following diagram and concept will become clear:

concept mega food park

Mega Food Park (Click to Enlarge)

  • Here, each tier is viable, independent and linked with higher players in the market.
  • This way thousands of farmers directly connected to food industries located in the Mega food park, without any commission agents= Small, marginal, poor farmers will get more money.

Location Factors: Bhagalpur and Chittor

DetailsSrini Mega Food park, AndhraBhagalpur Mega food Park, Bihar
Central Processing Center (CPC)Mogili Village in Chittoor DistrictKahalgaon in Bhagalpur district
Primary Processing Centers (PPC)
  1. Nuzvid,
  2. Tirupati,
  3. Madanapalle
  4. Mogilli
  1. Purnea
  2. Katihar
  3. Khagaria
  4. Samastipur
  5. Banka
Location Advantages
  1. Chittoor already an Agro-export processing zone, leading producer of mangoes.
  2. only 120 kms from Tirupati, a pilgrim center with more than 150,000 floating population per day=plenty of demand for processed food.
  3. on the National Highway connecting Bangalore and Chennai
  4. equi-distant from two major metros in India, a major port (Chennai) and two international airports (Chennai and Bengaluru) and one domestic airport (Tirupati)
  1. This region is second most productive zone in Bihar in terms of total production of fruit and vegetables
  2. The cluster is very close to Begusarai (about 100 kms) that is a transport hub and provides good support for transportation of products. NH-31 (Barhi to Guwahati) and NH-28 (Lucknow to Barauni) meet at “Zero Mile” near Barauni in Begusarai district.
  3. It is also the gateway to Northeast for goods transportation, being a zone heavy surface traffic movement.
SidenotesCountry’s first Mega food park launched in 2012#Epicfail. Few days back, main promoter company (Kevantar Ltd) left the project because of land acquisition problem.

back to the mega-food park topic:

Benefits of Each Mega Food park

  1. will benefit 6000 farmers / producers directly and 25000-30000 farmers indirectly.
  2. will generate ~40,000 direct and indirect jobs.
  3. New employment opportunities created within rural areas= It’ll reduce
    • rural-urban migration,
    • unplanned urbanization,
    • slums/social problems in cities
  4. will accommodate 30-40 Food Processing Industries in it.
  5. will have annual turnover of ~500 crore.
  6. will provide efficient supply chain management from farm gate to retail outlet.
  7. common facilities=reduces operational cost
  8. farmers can utilize the Cold Storages, Ripening Chambers, and Ware houses = less wastage, no distress sales
  9. good transportation facilities viz reefer trucks and vans
  10. Food entrepreneur can establish backward linkages (with farmers) and forward linkage (with retailers) = compact supply chain=more profits.

#2: Cold Chain infra

Full name of scheme: Establishment of Cold Chain, Value addition and Preservation Infrastructure

Looks like FoodPRO ministry doesn’t have any ‘intelligent’ babu to comeup with a fancy name/abbreviation for this scheme. Atleast they could have named it after you know who. But alas $harad Pawar is the b0$$ of Foodpro ministry, perhaps that’s why schemes are not allowed to be named after you know who.

Anyways what does this cold storage scheme do?

Helps creating integrated cold chain and preservation infrastructure facilities without any break from farm to consumer. Under this scheme, following facilities created:

  1. Minimal processing centre at the farm gate level having facilities like weighing, sorting, grading, pre-cooling, cold storage and normal storage facilities;
  2. Mobile pre- cooling vans and reefer trucks;
  3. Distribution hubs having facilities such as multi-purpose cold stores, variable humidity stores, blast freezing etc.
  4. food irradiation plants

Financial assistance

AreaGovernment gives grant: __ % of the project cost
General50
North East, Hill area, areas under integrated Tribal development plan75

Maximum grant: Rs.10 crore per project.

We’ll see more details on cold storage with respect to fruit-veggies processing in separate article later.

#3: Abattoir modernization

Abattoir= slaughterhouse/ butcher house. Food processing ministry runs a scheme for them. This scheme Under PPP mode with involvement of local bodies (Panchayats or municipalities) via

  1. build-own-operate (BOO)
  2. build-operate-transfer (BOT)
  3. Joint venture(JV) basis.

Features:

  1. establish new modern abattoirs
  2. modernize existing abattoirs
  3. promote scientific and hygienic slaughtering.
  4. Modern technology for waste management.
  5. better by product utilization (bones, skin etc.)
  6. provide chilling facility, retail cold chain management etc.

Financial assistance

areagrant for __ % of the project cost
General50
North East, Hill area, areas under integrated Tribal development plan75

Maximum grant: Rs.15 crore per project.

Ten slaughterhouse projects ongoing:

  1. Dimapur (Nagaland)
  2. Kolkata (West Bengal)
  3. Ranchi (Jharkhand)
  4. Shimla (Himachal Pradesh)
  5. Hyderabad (Andhra Pradesh)
  1. Patna (Bihar)
  2. Ahmednagar (Maharashtra)
  3. Jammu (Jammu & Kashmir)
  4. Srinagar (Jammu & Kashmir)
  5. Shillong ( Meghalaya)

So, these three were the main schemes of Food processing ministry.

  1. mega food park
  2. cold chain infra
  3. slaughterhouse modernization.

Now let’s look @some chillar schemes of this MoFPI (Ministry of food processing industries)

MoFPI: Misc. Schemes

North East
  • Name: Technology Mission for Integrated Development of Horticulture in NE States + Himalayan States
  • it has four mini-mission
  • mini-mission #3 To create post-harvest management, marketing and export facilities (by ICAR+Department of Agri research and Education)
  • Mini-Mission #4: To Process horticulture produces (by Food processing Ministry)
HRD#1 InstitutesMoFPI has two institutes to offer B.Tech, M.Tech, Ph.D level programs in food processing

  1. National Institute of Food Technology Entrepreneurship & Management (NIFTEM) at Kundli, Sonepat, Haryana
  2. Indian Institute of Crop Processing Technology (IICPT) at Thanjavur, Tamil Nadu

#2 Grant to Other universities

  1. all recognized universities- public / private can get funding upto 75 lakhs for starting food processing related courses, buying books, e-journals, magazines, teaching infrastructure etc.
  2. funding is given for training centers, entrepreneurship development program for food processing.
QualityTo export in developed countries, your food processing plant would require HACCP, GMP, GHP certificates. Ministry gives financial assistance for it.
testing labsscheme for Setting up/Upgradation of Food Testing Laboratories

Enough of Food processing Ministry. Let’s look at the schemes by other departments/ministries. (Here, I’m only focusing on schemes related to post-harvest management, storage, food processing and Agro-export, otherwise there are dozens of schemes related to agriculture, public procurements etc. but they’re ignored here.) First the food grains

National Policy on Handling and Storage of Foodgrains

Launched in 2000.

  1. To Minimize storage and transit losses in foodgrain.
  2. Declaration of foodgrains storage as “infrastructure” (meaning it can get various tax benefits for investment)
  3. Encourage mechanical harvesting, cleaning and drying at farm and market level
  4. transport of grains from farm to silos by specially designed trucks
  5. Construct chain silos.
  6. private sector participation via Build-Own-Operate (BOO)
  7. encourage private sector to
    1. building storage capacities in which grains procured by Government agencies would be stored on payment of storage charge
    2. create infrastructure for the integrated bulk handling, storage and transportation of foodgrains

PEG scheme

  • By Whom? = Department of Food & Public Distribution (DFPD)
  • In recent times, Government has increased the Minimum Support Price (MSP) for wheat and rice. Result? high procurement but FCI’s storage capacity =limited=rotten grains.
  • In 2008, new scheme was made “Private Entrepreneurs Godowns (PEG-2008).
  • To increase grain storage capacity with help of Private sector.
Government
  • gives grants to private players, for constructing godowns
FCI
  • gives a business guarantee of ten years for assured hiring.
  • meaning FCI will hire that private godown to store public-procured food grain and pay for service

FCI reforms

Initiates to prevent rotten grain in godowns, FCI will be doing following:

  1. Dunnage materials:  wooden crates, bamboo mats, polythene sheets to prevent moisture from floor to the foodgrains.
  2. fumigation, insecticides to control pests and rats.
  3. Regular periodic inspections of the stocks/godowns by senior officers.
  4. The principle of “First in First Out” (FIFO) to avoid longer storage of foodgrains in godowns.
  5. To avoid damage during transit:
    1. Only covered rail wagons will be used to transporting grain
    2. use of tarpaulins (waterproof canvas) on trucks during road movement.

Gramin Bhandaran Yojana

By Department of Agriculture & Cooperation

  1. Create scientific storage capacity and allied facilities in rural areas
  2. grading, standardization and quality control of agricultural produce to improve their marketability;
  3. Provide pledge finance and marketing credit to farmers, so they don’t have to distress sale immediately after harvest.

National Horticulture Mission (NHM)

  • By Whom? = Department of Agriculture and Cooperation
  • To increase production of all horticultural products (Fruits, Vegetables, Flowers, Plantation crops, Spices, Medicinal Aromatic plants) in the states.
  • Provides funding for various activities (R&D, nurseries etc) including funds for post-harvest management, supply chain infrastructure, cold storages.

Terminal market complexes (TMC)

  • scheme is being implemented under  National Horticulture Mission
  • These Terminal market complexes will establish forward linkages with wholesalers, distribution centres, retail cash and carry stores, processing units and exporters.
  • via PPP model under 12th Five year plan.
  • Maximum subsidy Rs. 50 crore to the Projects based on competitive bidding.

Some Terminal market complexs (TMC) projects:

  1. Patna, Pothai (Bihar)
  2. Perundurai and Madura (TN)
  1. Babangaon, Thane, Nasik (MH)
  2. Sambalpur (Odisha)

National Horticulture Board (NHB)

  • Autonomous society (falls under Department of Agriculture & Co-operation, Ministry of Agriculture)
  • For food processing, NHB runs following schemes
Commercial Horti
  • Full name: Development of Commercial Horticulture through Production and Post Harvest Management of Horticulture Crops
  • long name for scheme without catchy abbreviation!
  • but In short, they give subsidy for setting pack house, pre-cooling unit, cold storage, controlled atmosphere (CA) storage, refer transport, ripening chambers etc.
  • More subsidy is given for North East, Hill states and scheduled areas.
  • NABARD provides financing
Tech DvlpTechnology Development and Transfer for promotion of Horticulture

  1. Introduce of New Technology
  2. Visit of progressive farmers to other states / abroad.
  3. Technical know-how from India/Abroad
  4. Technology Awareness
  5. Organising/participation in seminars/symposia/exhibitions
  6. Udyan Pandit award to farmers
  7. Publicity and Films
  8. money to scientists for effective transfer of technology
  9. Accreditation and Rating of Horticulture Nurseries
  10. Mother Plant Nurseries
market informationnation-wide communication network for speedy collection and dissemination of market information including:

  1. wholesale prices, arrivals and trends in various markets of the country for important fruits, vegetables & flowers etc.
  2. retail prices in selected markets/cities
  3. international prices for potential export items
  4. horticulture database, production trends

then NHB issues farmers’ advisory using above reports.

Horticulture Promotion Service
  1. Specialized studies and surveys for targeted beneficiaries.
  2. Technical laboratories and consultancy services.
  3. Review the present situation of horticulture development in particular area/ State
  4. Identify constraints in horticulture development and suggest remedial measures
  5. Develop short term and long term strategies for systematic development of horticulture,
  6. Develop primary/secondary data of various aspects on horticulture
  7. Provide consultancy services, expert services & establishing labs etc
  8. Conduct technical scrutiny and certification of cold chain infrastructure
  9. Preparing reports relating to export competitiveness in the area of fresh horticulture produce

National Centre for Cold Chain Development (NCCD)

Setup during 11th FYP, under Societies Registration Act, to do following

  1. Create an enabling environment for the cold chain sector
  2. help private sector involvement in cold chain sector
  3. Financial assistance upto 90% to State Governments to setup/modernize/expand cold storages and ice plants via cooperatives.
  4. establish standards and protocols related to cold chain testing, verification, certification and accreditation as per international standards
  5. Provide technical assistance to Financial Institutions, Government Departments/ agencies, and industry for selecting cold chain component e.g. refrigeration units, refrigerated transport equipment, display cabinets, milk tanker etc.
  6. HRD and technical advisory.

Scheme for Agri Market

Full name: Scheme for Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization (Again too bad no fancy abbreviation.)

By Ministry of Agriculture.

  1. To Develop and Strengthen agricultural marketing infrastructure.
  2. Facilitate private and cooperative sector investments in marketing infrastructure.
  3. Provide additional agricultural marketing infrastructure to agriculture, dairy, poultry, fishery, livestock and minor forest produce.
  4. facilities for grading, standardization and quality certification of agricultural produce so farmers can get money commensurate with the quality of their produce;
  5. Introduce Negotiable warehousing receipt system
  6. promote forward and future markets
  7. To create general awareness and provide education and training to farmers, entrepreneurs and market functionaries.

Agmarknet

  • Agricultural marketing information network (http://agmarknet.nic.in/)
  • by Directorate of Marketing & Inspection (DMI) under Agro ministry.
  • it is an online portal that provides information on following
Pricesdaily prices of various commodities
Movementinformation on the type of goods that have arrived across the various wholesale markets Commodity
Farmers’ Advisory
  • A comprehensive database 300 commodities and 2,000 varieties
  • Appropriate farming practices which can be adopted by the farmer
Weather
  • All India weather conditions and weather forecasts and their impact on the agri-production levels
Commodity Exchangeinformation on various commodity exchanges in India and abroad along with
Researchhigher institutes for agricultural research, international agencies like the Food and Agriculture Organization

ok so far we saw the schemes associated with Agro+Horti+Marketing. Now moving to Dairy

Dairy Schemes

By Department of Animal Husbandry, Dairying & Fisheries

They run following schemes:

  1. install Bulk Milk Coolers at village level close to the area of milk production
  2. for installation of bulk milk cooler
Intensive Dairy Development Scheme (IDDS)
  • 100 per cent grants in aid for
  • Dairy processing and marketing
  • milk equipment for bulk milk coolers, chilling centers, refrigerated tankers and cold storage
Dairy Entrepreneurship Development Scheme (DEDS)
  • to encourage entrepreneurs in setting up modern dairy infrastructure for clean milk production
  • helps in bulk milk coolers, transportation facilities including refrigerated vans, cold storage facility

National Dairy Plan (NDP)

by National dairy development board (NDDB), with support from International Development Association (IDA)

  • Phase-1 (2012-17) was launched at Anand, Gujarat.
  • Scheme will run in 14 states – Uttar Pradesh, Punjab, Haryana, Gujarat, Rajasthan, Madhya Pradesh, Bihar, West Bengal, Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Orissa and Kerala.
  • ^These states collectively account for over 90% of country’s milk production.

National Dairy plan will do following:

  1. Breed improvement + animal nutrition=> increase milk production, reduce methane emission.
  2. Strengthen of village based milk procurement system= Rural milk producers to get greater access to the organized dairy sector.
  3. HRD, management, knowledge sharing, R&D and other fancy stuff

Funding pattern

ca$h comes from
  1. International Development Association (IDA) of the World Bank
  2. Central government (Department of Animal Husbandry, Dairying and Fisheries)
toNDDB: National Dairy Development Board (a statutory body)
ultimately toEnd Implementing Agencies (EIAs):

  • State Government
  • Cooperative dairy federations
  • Milk Producers Unions
  • ICAR institutes, and veterinary/dairy institutes and universities

^Exactly 159 words. Again aukaat of National dairy plan cannot be beyond 12-15 marks from UPSC point of view, hence not going into further details. Besides, we’ll look more into Dairy sector in separate article later. Time to move on to Agro-Export related schemes

Agri Export zones (AEZ)

  • In 2001, By Commerce Ministry.
  • Total 60 AEZs in 20 states.
  • To converge the efforts of central and state governments to increase agro-exports
  • AEZ concentrates on a particular produce/ product located in a geographically contiguous area (e.g. Mango in Chittur District of Andhra) and coordinates the ongoing Central-State schemes to cover the entire value chain from farm to the foreign consumer, including sorting, grading, packaging, processing, exporting.
chart-agri-export zones in India

Agri Export Zones in India (Click to Enlarge)

AEZ: Problems

  1. Government Agencies don’t take ownership or responsibility.
  2. Villagers and field officers are unaware about the scheme and its conceptual framework
  3. The Design of AEZ itself doesn’t have project orientation.
  4. Lack of coordination/ monitoring system in AEZs
  5. The investment made by central and state government have not materialized into real-useful assets on the ground.
  6. Indiscreet proliferation of AEZs in certain states. WB, Maharashtra have multiple Agro export zones while Odisha barely got one AEZ and that too in 2013= More than a decade after the scheme was launched in 2001!

Export credit schemes

  1. Focus Product Scheme (FPS)
get duty credit for exporting food products
  1. Focus Market Scheme (FMS)
Export to Europe, Latin America block, African block, or Commonwealth Independent States (CIS) block are entitled for duty credit.
  1. Market Linked Focus Product Scheme (MLFPS)
duty credit for exports to countries NOT included in above FMS list e.g. Thailand, Taiwan and the Czech Republic. (ok then when next: another scheme for countries not included in MLFPS list?)
  1. Vishesh Krishi
  2. And Gram Udyog Yojana
duty credit for exporting following

  1. Agricultural Produce and their value added products;
  2. Minor Forest Produce and their value added variants;
  3. Gram Udyog Products;
  4. Forest Based Products; and
  5. Other Products, as notified from time to time.

Doubt: what is duty credit?

Without going into all technical correctness:

  • You exported xyz worth Rs.100 then Director General of Foreign trade will give you a scrip (piece of paper) worth Rs. 2 to 5 (or whatever % credit is decided in the scheme)
  • When you import capital goods, you’ve to pay custom duty. But you can use these credit scrip to pay for that custom duty.

Another doubt: Why does or why should government give duty credit?

Ans. Because other (stupid) schemes have failed to improve the rural infrastructure, hence it is difficult to transport/market these products from India to abroad. Therefore duty credit is given to offset infrastructure inefficiencies and other associated costs involved in marketing of these products.

Misc. Bodies

List is not exhaustive (and that is the criticism: too many bodies=lack of coordination.)

Export related

APEDA
  • Agricultural and Processed Food Products Export Development Authority (APEDA)
  • Statutory body under commerce ministry
  • provides financial assistance to food exporters.
  • bears the cost for doing analysis of peanuts, grapes for meeting HACCP/Codex standards.
  • Gives money to State Government, Public Sector Undertakings for conducting surveys, feasibility studies etc.
MFEDA
  • Marine Products Export Development Authority (MPEDA)
  • Ministry of Commerce, Government of India
  • acts as a coordinating agency with different Central and State Government
  • For Fishery production and allied activities.
EIC
  • Export Inspection Council of India (EIC)
  • statutory body under Commerce Ministry
  • For inspection- certification for marine, milk, meat, poultry, marine and egg products, and honey for export units.
  • EIC approved units have to implement following
  • international standards of CODEX laid down by FAO and WHO,
  • Good Management Practices (GMP)
  • Good Hygiene Practices (GHP)

Boards

  • Coffee Board
  • Spices Board
  • Tea Board
  • bodies under commerce ministry
  • offers various schemes, services to growers and exporters
  • R&D, HRD
  • maintains database, runs newsletters
  • Promotes Indian products international food fairs
Grapes
  • Indian Grape Processing Board (IGPB)
  • Under Ministry of Food processing Industries (if tea, coffee and spices boards were setup under Commerce ministry then why did they setup grapes board under Food processing ministry? Ans. so they can confuse aspirants to ask a stupid MCQ in some exam.)
  • Promote cooperative efforts, backward and forward linkages between growers and wine industry in general.
  • set up facilities for wine analysis, testing, standards, certification of wine and promoting Good Manufacturing Practices (GMP)/ Hazard Analysis and Critical Control Points (HACCP)
Nddb
  • National Dairy Development Board
  • Statutory body
  • To promote, finance and support dairy cooperatives.
Meat + Poultry
  • National Meat and Poultry Processing Board (NMPPB)
  • Under Ministry of Food Processing Industries
  • a single window service provider for producers/manufacturers and exporters of meat and meat products,
  • For analyzing various microbiological and physico-chemical parameters related to various food and food products.
  • Training meat workers

Research/Education related

ICAR
  • Indian Council of Agricultural Research (ICAR) is an autonomous organisation under the Department of Agricultural Research and Education (DARE), Ministry of Agriculture, Government of India.
  • ICAR is the apex body for co-ordination, research n development (R&D) and education in agriculture including horticulture, fisheries and animal sciences in the entire country. HQ=Delhi
CFTRI
  • Central Food Technological Research Institute(CFTRI), Mysore (part of CSIR)
  • R&D in food science, food safety, low-cost food processing etc.
Crop processing
  • Indian Institute of Crop Processing Technology (IICPT)
  • under the Ministry of Food Processing Industries,
  • Teaching, research, labs and extension services in food processing
NIFTEM
  • National Institute of Food Technology, Entrepreneurship and Management (NIFTEM)
  • Deemed to be University
  • Under Ministry of Food Processing Industries
  • high quality educational and research programme
  • support the regulatory authority through referral advice on food standards.
  • Developing world class managerial talent with advanced know how in food science and technology.
Nutrition
  • National Institute of Nutrition under Ministry of Health and Family Welfare
  • for R&D on food-nutrition-toxicology studies.
Horticulture research
  • Indian Institute of Horticulture Research, Banglore
  • developing new hybrids, pest-disease-nutrient management etc. for fruits, vegetables, ornamentals, medicinal and aromatic plants and mushrooms

Next article, we see the nuisance of middlemen, APMC Acts, direct cooperative markets (Rythu bazar etc).

Mrunal recommends

  1. (free) NCERT, NIOS, TN-Books 4 History,Geo,Sci
  2. Indian Polity M.Laxmikanth (Hindi | English)
  3. Spectrum: Modern History (Hindi | English)
  4. Maths: Quantam CAT Sarvesh Kumar
  5. Objective General English SP Bakshi
  6. Word Power made Easy -Norman Lowe
  7. Topic wise Solved Paperset by Disha

28 Comments on “[Food Processing] Mega Food parks, Agri-Export Zones(AEZ), Cold Chains and truckload of government schemes”

  1. thanks a lot sir

  2. Thankyou sir….its very helpful

  3. thank you very much sir. Very neatly analysed.

  4. Dear Sir,
    Please write some notes on PDS and subsidy.

    thanks

  5. Respected Sir,

    Thanks for this owesome article series.

  6. Mrunal Sir,
    Do u know the best thing associated with your article
    “It brings a unique happiness inside whenever u released some new articles. It’s an awesome feeling something like what one get’s from his loved one’s (parents, siblings, teachers) that they deeply care for him”

    Keep shining our hearts….

  7. thank you mrunal … please keep posting !

  8. Dear sir
    Kindly guide suggest me about the notes for gs and geography(for mains) for quick preparation.
    whose notes are the best and where i can get it.

  9. sir plz do smthg regarding invest models and that farm subsidy topic of paper 3

  10. Excellent article.Well explained and easy to understand.Thank you.

  11. i can see ur hard work sr………… thanks a lot

    really outstanding article

  12. sir,
    your articles are awesome.find it very useful.
    thanks for your efforts.

  13. Hello sir,
    what is the use of establishing the cold chains when we will not be able to provide them with 24×7 power. Anyways the products will rot and will lead to another scam….cold chain scam:-)

  14. Extremely helpful article, presented in a very lucid manner..
    Thanks , sir..

  15. VERY INFORMATIVE SIR THANK YOU.

    1. thanx… good clip….

  16. im playing the devil’s advocate here but why does the govt need to set up food parks… isnt it enuf that it has deregulated de licensed the industry… let the mncs (kellogs, nestle) and cooperatives set up their own infra… so that it focuses more on consolidating legislation s and setting standards and labs etc…. any one??

  17. You have an amazing sense of humour.. Handled in your articles excellently…Reading that in between the lines really reduces the stresslevel..Keep it up ..

  18. Hi Mrunal. As much as your articles are extremely informative, I have a criticism for you. Instead of calling government schemes “thuggery” “stupid” “useless” and being as sarcastic as you possibly can when an oppurtunity presents you, you could be more constructive by simply filing some Right to Information (RTI) notices and hold them accountable personally. In fact, you, in your situation, are better placed than any of us to do so, with your superior knowledge on all these matters. Imagine the difference you can make and a real sort of impact on these issues through the legal route. Although your comments may all be in a light vein, and can be passed of as your sense of humour, something more agitated and antagonized comes through too. I understand your frustration, and hope you can vent it in a more useful way.

    In no way do I mean to offend you, and already understand you may be short on time or something like that to pursue these social ‘activist’ issues, but in that case I would request you to please polish your language while writing such immensely useful articles. All that negative wording takes away from the brilliance of research and effort you’ve put in.

    Regards,
    Adreeka

  19. i have to make big plant nursaries near tirupati please sugest me

  20. your articles very impressive. please mail your new articles to me

    thanking you

    g.babu

  21. Sir , thank you, send me for Gujarat farmer mega food park or send me your cell

  22. Sir, I am interested in opening a food testing lab also for which the ICAR and MOFPI is giving financial assistance. Plz help me how to apply and whom should I contact regarding this. Is there any consultant or any kind person Who can help me

  23. Respected sir I need full information to set up a commercial processing juice industry by using sweet lime and acid lime and tomato in one unit seasonally. Please provide me project proposals with all budjet details.

  24. bahut sahi aur satik shabdo ka prayok :)

  25. What type of questions can we expect from this section of the syllabus (Food processing industry) in the UPSC Mains GS3 ?

  26. Why the govt is confusing us with lot of schemes………..

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