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Monday, January 25, 2021

Food Parks — the mega push that did mighty little for crop diversification

Envisaged to pull Punjab farmers out of wheat-paddy cycle, the 3 mega food parks are struggling to even reach their optimum capacity with one running into financial trouble and the other functioning with just 33 per cent occupancy.

Written by Navjeevan Gopal | Chandigarh | Updated: January 9, 2021 9:57:35 am
A farmer sprinkles urea in his wheat field at a village in Bathinda on Friday. (PTI Photo)

Amidst the ongoing protests against the three agri laws and the demand for legal sanctity to minimum support price (MSP), experts have raised questions on the sustainability of the wheat-paddy cycle of farming and pointed that if peasants, especially those in Punjab, want to increase their income, they must opt for crop diversification – something that has remained a distant dream in the state.

As then Union Food Processing Minister, Shiromani Akali Dal leader and Bathinda MP Harsimrat Kaur Badal – she resigned from the Cabinet last year in protest against the three agri laws – pushed for crop diversification in Punjab and got three mega food park projects sanctioned for state. The information gathered by The Indian Express, however, reveals that the food parks have not given much fillip to crop diversification.

The first such project – International Mega Food Park Limited (IMFPL) worth Rs 130 crore and spread in an area of 55 acres – was set up in Fazilka district. It ran into financial trouble in 2018, nearly four years after becoming operational in October 2014 during the Harsimrat’s second tenure as Union Food Processing Minister.

A functionary of the IMFPL informed that the park had been in “financial trouble” and “National Company Law Tribunal had appointed an administrator for resurrecting the it and infuse investment by new investors.”

The functionary said the only facility which was currently functional there was a venture by Schreiber Dynamix Dairies Private Limited (SDDPL) and Tetra Pak South Asia Markets, manufacturing beverages using fruit concentrates.

Before it ran into fiscal woes, the park housed facilities for processing milk and manufacturing milk powder (Novello brand), Individually Quick Frozen (IQF) line to freeze peas and power generation from husk, among others.

On June 30, 2019, IMFPL chairman and managing director Sukhinder Singh was booked by the Central Bureau of Investigation for allegedly orchestrating a fraud of Rs 33 crore – the amount it had taken as loan from the Small Industries Development Bank of India (SIDBI).

As per the FIR, the fraud where bills of industrial machinery were allegedly forged, was carried out by the IMFPL through its machinery supplier, Food & Biotech Engineers Pvt Ltd. The FIR also named Sukhinder’s wife Kanwal Sukhinder Singh, son Simarinder Singh, and others.

The second project of Union Food Processing ministry promoted and developed by Punjab Agro Industries Corporation (PAIC) in Ladhowal in Ludhiana, as per the information gathered by The Indian Express reveals, has an occupancy of only little more than 33 per cent of the plotted area.

The Rs 117-crore PAIC project, which also goes by the name of Gur Kirpa Mega Food Project, is yet to be formally inaugurated. Three players, however, had started their operations in the park between 2018 and 2019, said a government functionary.

In the total plotted area of 54 acres out of the total 100 acres of the project land (which include roads, green belt and other parameters), 12 food processing units have come forward to start operations on 17 acres of land.

Godrej Tyson, which is into ready to eat and cook products and frozen food; Iscon Balaji, which is into production of potato flakes; and Meat Masters, which is into frozen meat products, have already started commercial production at PAIC food park. The other nine players who have come forward to start operations there are Field Fresh Foods (sauces, mayonnaise: brand Del Monte); Sharman Jain (sweets, bakery and ready-to-eat products); Shree Sharda Shakti (bakery products); Rishika Foods (bakery products); Shri Sant (fruit murrabas, crushes); Gamut Foods (confectionery food products); Roseberg (namkeens)’, and A Qube (ready to eat products).

In February last year, a penalty of Rs 2.5 crore was imposed on Punjab after Harsimrat, as then Union minister, alleged that the Congress government in state led by Captain Amarinder Singh was “deliberately delaying” the mega food park project in Ludhiana.

PAIC general manager (Projects) Japinder Bajwa, however, said that the state government had not been at fault because the penalty was based on plot occupancy. Bajwa said a cut was made by the Centre in third tranche of the grant as there was less than 25 per cent of the plot occupancy in the park at that time.

“Grants are released conditionally. To receive fourth grant, a minimum of 75 per cent plots should have been sold,” said Bajwa, adding that state government cannot do much in that scenario and it depended entirely on market players coming forward to buy plots.

The plot occupancy in the Ludhiana park remains around 33 per cent, despite the fact that any industrialist setting up a unit can get loan from NABARD. There is another incentive – the industry is offered 35 per cent subsidy, maximum upto Rs 5 crore, on plant and machinery.

Bajwa, meanwhile, added that “we are coming up with a state-of-the-art food testing laboratory, which would have certification from National Accreditation Board (NABL).”

The third and latest of the three projects in Punjab, Sukhjit Mega Food Park and Infra Limited (SMFPIL), was inaugurated by Union Agriculture Minister Narendra Singh Tomar in November last year, after Harsimrat quit the Union Cabinet.

The 107.83-crore project is spread over 55 acres in Kapurathala’s Rehana Jattan village. The land has been taken on a 30-year lease by the promoter. The Centre has so far released a grant of Rs 38.76 crore.

The mega food park, among other operations, is aimed at encouraging cultivation of maize in the region, which had been a traditional maize growing belt before the crop pattern tilted towards wheat-paddy cycle.

“We are moving towards stabilization phase,” said SMFPIL CMD Bhavdeep Sardana. “We have set up a maize-based anchor unit at a cost of over Rs 100 crore. The central and Punjab governments have encouraged us to create facilities to give an alternate option to the farmers, other than paddy. The park will cater to traditional maize growing belt. The idea is to create industrial demand,” said Sardana, elaborating that products lines in the park would include starches, sweeteners, starch derivates which go into food and beverages, pharmaceuticals, textiles, papers and poultry and cattle feed.

Sardana, however, said that due to Covid-19 pandemic, and a policy clause, both big and small investors, respectively, were not coming forward to set up the units in the park.

He added that “while big investors had postponed their investment activities, the smaller ones were not going for getting plots as they are not allowed to mortgage the leased land to get loans.”

Due to Covid, Sardana said, there were delays in commissioning of the machinery imported from China for the anchor plant as zoom meetings were the only way where technical assistance was being sought to commission the machinery.

He added that “once we reach full capacity, we would be able to process 600 tonnes maize a day and more than 2 lakh tonnes per annum.”

“Marketing of maize will be no longer a problem for farmers. They can sell in vicinity. Not only maize, they can also sell vegetables like carrot, peas, cauliflower etc if the local entrepreneurs join hands to set up such units in the park,” said Sardana.

Noted agri-economist and Chancellor of Central University of Punjab at Bathinda, Sardara Singh Johl said, “I do not see any crop diversification happening in Punjab. Until and unless there is assurance of equal marketing and income as is the case with wheat and paddy, there are no chances of crop diversification.”

Johl added that while designing such mega food projects, “the viability has to be seen”. He added that comprehensive scheme should be in place, demand for the alternate crops should be created and businessmen and industrialists should be taken on board.
Harsimrat was not available for comments despite repeated attempts.

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