With a view to reduce wastage of farm produce, Finance Minister Pranab Mukherjee on Monday announced to set up 15 more mega food parks in the country and asked states to reform the Agriculture Produce Marketing Act (APMC) urgently to improve the supply chain.
"An estimated 40 per cent of the fruit and vegetable production in India goes waste due to lack of storage, cold chain and transport infrastructure. To address these issues, during 2011-12, approval is being given to set up 15 more Mega Food Parks," Mukherjee said in his Budget speech. So far, 15 such parks have been sanctioned, he said, adding the 11th Five Year target was to set up a total of 30.
Pointing out that recent rise in prices of vegetables and fruits has exposed serious flaws in supply chains, Mukherjee said: "The government-regulated mandis sometimes prevent retailers from integrating their enterprises with the farmers. There is need for the states to review and enforce a reformed Agriculture Produce Marketing Act urgently."
In the 2011-12 Budget proposal, the allocation for Food Processing Ministry has been enhanced by 50 per cent to Rs 600 crore as against Rs 400 crore of the revised estimates of the current fiscal.
As a measure to boost investment in agri-infrastructure, Mukherjee extended the Viability Gap Funding Scheme (VGFS) for public private partnership (PPP) projects in setting up of modern storage capacity besides giving infrastructure status to cold chains.
The VGFS provides financial aid in the form of grants to infrastructure projects undertaken through PPP, with a view to make them commercially viable.
"To attract investment in this sector, henceforth, capital investment in the creation of modern storage capacity will be eligible for viability gap funding scheme," he said.
He further said air-conditioning equipment and refrigeration panels for setting up of cold chain facilities would be exempted from excise duty from next fiscal. Conveyor belts for equipments used in cold storages, mandis and warehouses would be also exempted from excise duty, he added.
It is necessary to augment storage capacity, considering "very high level" of foodgrains procurement during 2008-10 and high foodgrains stock in the central pool, Mukherjee noted.
As on January 1, the foodgrains stock has reached 47 million tonnes, which is 2.7 times higher than 17.4 million tonnes in the same period 2007, he added.
He highlighted that the government has put on fast track the creation of additional 15 million tonnes of storage capacity through public private partnership (PPP).
"While we will be able to add about 0.26 million tonnes of capacity by next month, based on existing sanctions, the addition will reach 4 million tonnes by March 2012," he added.