Rs 100 cr for 10 mega food parks

CII NATIONAL CONFERENCE AND ANNUAL SESSION 2005

To attract larger private investments in the food processing sector, the government was considering an investment of nearly Rs 100 crore to set up at least 10 mega food parks in the major fruits and vegetable producing states, said Subodh Kant Sahai, minister for food processing.

"To encourage foreign investors the government is working on agri-zones and the concept of mega food parks. The government is willing to invest up to Rs 100 crore in these parks," he said at the CII meet.

The central government is also working towards allowing 100 per cent foreign direct investment and significant income-tax benefits to companies in this sector.

Sahai said the government would ensure that bottlenecks like availability of power and water were taken care of at the proposed food parks.

The government, he said, would place the draft proposal on the integrated food law before the Cabinet in the next 10 days so that it could be tabled in the next Parliament session in July.

He said the integrated draft Bill had brought 16 laws under one umbrella and acknowledged the industry's role in expediting the process of drafting the Bill.

Sahai assured the industry that he was pushing hard for a zero-duty structure for perishable food items. "The maximum limit can be 4 per cent but it is very unfortunate that currently such products are being placed in the 12.5 per cent category," he added.

Currently, primary processed food accounts for Rs 2,80,000 crore but it is estimated that value-added processing can throw open an additional Rs 1,80,000 crore market.

Speaking at the conference, Piruz Khambatta, chairman, Pioma Industries said the burden of taxation and a host of duties needed to be minimised in order to provide a big push to the industry.

He also sought changes in the legislative regime at the state level to encourage contract farming with land reform measures.

Striking a cautious note Hardeep Singh, managing director, Cargill India, said contrary to common belief, India was fast becoming a food deficit country. With a large number of farmers shifting to cash crops such as oilseeds, the production of wheat, rice and pulses has taken a beating.

He argued that to produce 5 million tonnes of oilseeds, the country would have to sacrifice arable land required to produce as much as 35 million tonnes of wheat.

"India and China have already emerged as the two biggest food deficit countries in this region, and we need to invest heavily and quickly in raising our farm input," he said.