Harsimrat Kaur Badal, Union Minister of Food Processing, wants to set up at least one mega food park in every state. The idea is to build infrastructure and boost the farm and food processing sector, which in turn will benefit farmers and generate jobs for locals. In times when the scheme is in the news for all the wrong reasons, Badal tells Business Today how MFPS will be central to Make in India. Excerpts:
BT: The Mega Food Park Scheme has not taken off the way it should have. Why so?
Badal: The scheme was launched in 2008. The gestation period was 24 months. Whatever was sanctioned in 2008/09 should have come up by now. However, when I took over last year, (I realised that) out of the 42 food parks that were sanctioned, only two had become operational. In 50 per cent, practically no work had started. There were certain inherent flaws. For example, it was a huge challenge for promoters to get (the mandatory) 50 acres of land. CLU (change in land use) from agricultural to industrial was also a challenge. Sub-lease approvals took time. It also seemed that most developers were interested in the Rs 50 crore grant; and considered the land (for the park) as a real estate proposition. They never had the intention to put up an MFP. There were 17 developers who had got in-principle approvals but had done nothing. They were just writing letters for extensions. So, the inter-ministerial committee decided to cancel their approvals and allot to those who had the intention to build them and already had a head start.
BT: What steps did you take to rectify the situation?
Badal: We looked into each case specifically and found that some of them are not going to see the light of day. Once we cancelled the 17 projects, we got 150 (fresh) applications. We had a very transparent system to grade them for selection. We had learnt from past mistakes, so we started giving more marks to those who already had land. The idea is to create the infrastructure within the time frame to help farmers, cut down wastages and generate employment. We have also made a food map which mentions the availability of raw material in each state to help entrepreneurs know where to start from. We do a lot of hand holding. We have also set up a portal where investors and entrepreneurs can ask questions, make suggestions and connect.
BT: What were the other missing links?
Badal: We found that once the promoter had put up the core infrastructure they were not interested in sub leasing it. The whole concept of mega parks was to have smaller players use the facilities at the MFP. But the promoters made the sub lease amount very steep so that smaller units could not use the facility. Now, we have held back the last instalment of the grant. Until they get 25-30 per cent of external units in the park, we will not release this amount. Another issue was of primary processing centres (PPCs), benefits of which would go up to the farm gate level. Maximum wastages happen at this stage. Promoters were keen to reduce them. But we had to put our foot down and told them to comply with whatever was stated in the detailed project report. We had to monitor every case in a more focused and balanced manner so that it impacts the well being of the farmer.
BT: What steps have you taken to realise your goals?
Badal: We have followed a twofold approach: On one side 17 new MFPs and 30 new cold chains have been announced. On the fiscal side a Rs 2,000-crore corpus in NABARD has been created to encourage units to move into food parks. With affordable credit at 9 per cent interest, more entrepreneurs will think of putting up a unit in an MFP. We have also facilitated priority sector lending by RBI for food processing; brought down the excise duty on import of plant and machinery from 10 per cent to 6 per cent. These steps will boost the sector and make it more competitive. Besides, we are coming up with a skill council to ensure skilled manpower is available for this industry. My vision is eventually to help the the farmer. It is essential that a farmer is in a position to add value to his products and increase his income. Infrastructure must be built in such a way that processing units for whatever the farmer grows should be within his reach. We want to create this infrastructure at the farm level through PPCs. We are the largest producer of milk; second largest producer of fruits, vegetables and cereals; third largest producer of marine and livestock. But, only 10 per cent is getting processed. If you look at the wastage figures, they are mind boggling. Our population is the second largest globally and is increasing 1.5 per cent every year. Therefore, land for cultivation is shrinking. So, there's no space for wastage. Our prime focus is to make it zero wastage and, for that, we need to create infrastructure, with good storage facilities and processing units for all farm produces. As a consequence, inflation will also come down.
BT: Have you set any targets for the next two years?
Badal:The gestation period of food parks is 30 months now from 24 months. So, my targets are very clear: timelines must be met. I am trying to ensure that serious players are not stuck in red tapism by increasing the online interface in my own ministry and having a transparent system, by reducing paper work so that they do not have to come here and hope to get their grant released on time. It should be automatic. My aim is that the 42 MFPs come up as soon as possible, within the time frame. And, this will show what impact it can have on the ground. And, I believe, it will have a very positive and major impact.
BT: Make in India is important for the government. Do you see MFPs as a part of the initiative?
Badal: The 42 mega food parks will bring in a lot of investments and once they become operational will create five lakh jobs and benefit at least 12 lakh farmers. We have made the entire system more transparent to ensure ease of doing business. We are creating infrastructure for investors to come and plug-and-play at the food parks. It is a huge step in the direction of the Make in India initiative. I feel there is bigger potential for cold chains, too. We have already announced 30 new ones. This will form a seamless grid from the farmer to the consumer.