Monday, February 6, 2012


Ever since the Ministry of Food Processing Industry(MoFPI)was established as a Special Purpose Vehicle of Government of India two decades ago, like any other government agency, this set up has been producing reams of papers, often glossy, promising many things and raising visions of a vibrant food industry in the country. It is well known that on a per unit investment food processing sector create more employment provided it is dominated by small and medium scale enterprises. If large scale mechanization is deployed in the processing, the employment content comes down drastically. A look at the past developments, the Indian food industry is increasingly being controlled by Mega companies and MNCs with huge investment and capital intensive foreign originated technologies sidelining the small and tiny sector players. Frequent "declarations" that MoFPI would increase the value addition to agricultural produce, raise the GDP contribution and substantially increase exports is turning out to be mere sloganeering and whatever the country has been able to achieve so far is in spite of the government by the enterprising private players. The latest "Plan" to set up 10 Mega food parks can materialize only if adequate industry friendly environment is provided and just offering subsidies will end up in huge tracts of land being appropriated by big fishes under the garb of establishing food processing units. Here is the grand stand posturing of MoFPI on this grandiose plans.

"The food parks will be built in Andhra Pradesh, Punjab, Jharkhand, Assam, West Bengal, Uttarakhand, Tamil Nadu, Karnataka, Bihar and Tripura. Ministry has introduced Mega Food Parks Scheme (MFPS) to accelerate the growth of food processing industry in the country through facilitating establishment of strong food processing infrastructure backed by an efficient supply chain. Ministry informed that the scheme provides for a capital grant of 50 percent of the project cost in difficult and Institute for Transportation and Development Policy(ITDP) notified areas(with a ceiling of Rs 50 crores). The government is likely to be spent a sum of Rs.488 crore by March 2012 on the scheme for technology upgradation and modernization of food processing industries. A Mega Food Park takes about 30-36 months to be completed. The working group on food processing for the XII Plan has recommended a new centrally sponsored scheme in the form of National Mission on Food Processing (NMFP) proposed with seven components".

It is true that China has achieved lot using the strategy of Mega Food Parks which helped that country as a major exporter of processed foods of all hues at relatively low cost. But this has happened because of extraordinary facilities and support provided by the government there in stead of just "passing on" the money as it is happening in India. A Mega Food Park must be "mega" in size by bringing in many diverse processors from the small and medium scale sector in stead of a few mega companies with very little employment content. In stead of Mega Parks what the country needs is hundreds of functional industrial estates with superb infrastructure and a few common facilities including marketing help. Big companies have sufficient resources to set up their own facilities and do not need any prop from the government. One can only hope better sense will prevail eventually!


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