Ironing out niggles
The Jharkhand Mega Food Park may become operational again as a Singapore based company Indian Ocean Group PTE Ltd. has shown interest in running it. The food park was set up at Riyada near Getalsud dam in Jharkhand state to generate 6,000 direct and indirect employment and benefit 25,000 to 30,000 farmers. But, ever since it was inaugurated in 2016, not a single unit was sold and remained non-operational.
Its management was affected after the demise of its Mumbai-based director in Dubai. In the absence of any business unit starting there, it became a non-performing asset and went into liquidation. The National Company Law Tribunal (NCELT), some time back, accepted the offer of the Indian Ocean Group and the further process of handing over the food park to the new company will begin now.
Helping to establish mega food parks is one of the major schemes of the central government. Though the scheme was launched in 2008, when the Bharatiya Janata Party (BJP) came to power at the centre it gave more thrust to the scheme. It was launched to give impetus to the food processing sector in the country, thereby reducing the food losses caused by time consuming transportation and inadequate storing facilities. Despite being a leader in food production, India's performance in processing the products is very low. Hardly 10 per cent of its food production is processed. Hence, the scheme had set a goal of expanding processing of perishable agri-products from 6 to 20 per cent.
Another important goal of the project was to increase India's share in the global food trade by at least 3 per cent by 2015. Employment generation and benefitting the farmers was the third important goal. Till about nine months back all 41 mega food parks were approved by the government. However, of them, only 22 are operational and 17 are in various stages of implementation. The functional parks have generated an estimated 6 lakh jobs, as claimed by the government. However, it is not smooth sailing for all the operational food parks. There are reports of units facing several problems, with some parks unable to meet the set goals.
For instance, each park was expected to generate 5,000 jobs. But, of the 19 food parks only four could meet the target as per the information available till a year back. Some more may have been added in a year. Generating fewer employment opportunities is also an indicator of a lesser number of units functioning at the parks.
Experts feel that one common set of rules for setting up parks anywhere in the country is one of the major hindrances. This has kept major companies away from investing in food parks, as in their opinion, different models should be allowed to be developed as per the local requirements. The government had initiated some steps to make amendments in some of the rules in response to the industry's concerns. For instance, the initial rule necessitated having partners, but now a single investor is allowed to set up the park. Another change in the policy was to allow the investors to sell the units rather than to give them on lease. Probably in response to the issues raised by the industry, the government did a third party evaluation of the functioning of the Mega Food Parks in 2021. It was an important step from the government's side to understand the issues. This evaluation could be an eye opener for the policy makers as well as the industry and investors. Some of the rules that were obstructing the progress of the food parks could have been amended following the evaluation.
As a Singapore-based company is now helming the food park in Jharkhand, operational roadblocks can be identified and tackled. That may also help the government to make more amendments in the rules to boost their progress. Success of food parks is important not only from the perspective of growth of an industry sector, but it is more important from the perspective of reducing food wastage.