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Rp.15.GS3. A115.

Mega food park scheme

Name: Aditi Diwan

Roll no: 138
Team: 7
Topic name and number : A115 Mega food park scheme


What is it
Mega Food Park Scheme is the flagship program of the Ministry of Food
Processing Industries, Government of India. Mega Food Park Scheme
proposes a demand driven/pre-marketed model with strong
backward/forward linkages and sustainable supply chain.
The primary objective of the proposed scheme is to facilitate establishment
of integrated value chain, with processing at the core and supported by
requisite forward and backward linkage.
The scheme provides for creating infrastructure for farm level primary
processing centre-cum- cold chain in identified clusters, processing of
intermediate products, collection centre cum cold chains, centralized
infrastructure to take care of processing activities, which require cutting
edge technologies and testing facilities, besides the basic infrastructure for
water supply, power, environmental protection systems, communication etc.

The supply chain will establish on-Farm Primary Processing Centre cum
cold chain facilities for aggregation of the produce at village level, which will

be linked to the retail outlets/processing parks through appropriate produce

aggregation facility and collection centre cum cold chain and Refer van
transportation net works. The scheme is proposed to be entrepreneur
driven to be implemented on a PPP basis.
The scheme envisages a onetime capital grant of 50% of the project cost,
subject to a maximum of Rs. 50 crores in general areas and 75% of the
project cost, subject to a ceiling of 50 crores in difficult and hilly areas i.e.,
North-East Region including Sikkim, J&K, Himachal Pradesh, Uttarakhand
and ITDP notified areas of the States.
Started When
The scheme was originally launched as the 2008 Food Parks Scheme
(FPS). The objective of this scheme was to raise the processing of
perishables in the country from the existing 6% to 20% and increase value
addition from 20% to 35%.
Further, its objective was to increase the share of India in the global food
trade from 1.5% to 3% by the year 2015.
Configuration of the project
It will include Creation of infrastructure near the farm, transportation,
logistics and centralized processing centers. The main feature of the
scheme is a cluster based approach.
The scheme will be demand driven; pre-marketed and would facilitate food
processing units to meet environmental, safety and social standards. The
expected outcome is increased realization for farmers, creation of high
quality rural processing infrastructure, reduction in wastage, capacity
building of the producers and processors and creation of an efficient supply
chain along with significant direct and indirect employment generation.
Contents [hide] Salient Features of the Mega Food Park Scheme
Government Assistance Under Mega Food Park Scheme Most important
Features of Mega Food Parks Implementation of the Mega Food Park
Scheme Outcomes of the Mega Food Parks Who will arrange land? What
is the role of state government? Salient Features of the Mega Food Park

Scheme The scheme aims to facilitate the establishment of a strong food

processing industry backed by an efficient supply chain, which would
include collection centres, primary processing centers and cold chain
The food processing units, under the scheme, would be located at a
Central Processing Centre (CPC) with need based common infrastructure
required for processing, packaging, environmental protection systems,
quality control labs, trade facilitation centres, etc.
The extent of land required for establishing the CPC is estimated to be
between 50-100 acres, though the actual requirement of land would
depend upon the business plan, which may vary from region to region.
CPC would be supported by farm proximate Primary Processing Centers
(PPC) and Collection Centres (CCs) in identified locations based on a
techno-feasibility study, adequate to meet the requirements of the CPC.
The land required for setting up of PPCs and CCs at various locations
would be in addition to land required for setting up CPC. It is expected that
on an average, each project will have around 30-35 food processing units
with a collective investment of Rs 250 crores that would eventually lead to
annual turnover of about Rs 450-500 crores and creation of direct and
indirect employment to the extent of about 30,000.
However, the actual configuration of the project may vary depending upon
the business plan for each Mega Food Park. The aggregate investment in
CPC, PPCs and CCs should be proportionate and commensurate to the
size of the total project keeping in view the economies of scale. The
Scheme was co-terminus with the 11th Plan period. However, projects
which have received the final approval under the scheme shall continue to
receive the grant support and benefits of the scheme.
Government Assistance Under Mega Food Park Scheme
The MFPS scheme envisages a onetime capital grant of 50% of the project
cost (excluding land cost) subject to a maximum of Rs. 50 crores in general
areas and 75% of the project cost (excluding land cost) subject to a ceiling
of Rs. 50 crores in difficult and hilly areas i.e. North East Region including

Sikkim, J&K, Himachal Pradesh, Uttarakhand and ITDP notified areas of

the States.
Most important Features of Mega Food Parks Cluster Based Approach
Demand driven with focus on strong backward and forward integration
Enabling Infrastructure Creation along the supply chain and technology
Creation of Central Processing Centre (CPC) and Primary Processing
Centres (PPC)
Common Facilities and amenities to be assisted
Leverage investments in food processing units
Stakeholder participation with private led initiative through Special Purpose
Vehicle (SPV)
Assistance to creation of common enabling facilities
Typical Project Cost envisaged Rs 120-150 crore Land not eligible for
funding out of GOI grant
Assistance from Ministry Limited to non-land component of the project 50%
of project cost limited to Rs 50 crore in general areas
75% of project cost limited to Rs 50 crore in difficult & hilly areas and ITDP
notified areas.
Implementation of the Mega Food Park Scheme
Implementation of the Mega Food Park is done through the Special
Purpose Vehicle (SPV) mechanism in which Financial Institutions/Banks,
organized retailers, processors, service providers, producers, farmer
organizations and other related stakeholders are the equity Holders.
Each SPV is a Body Corporate registered under the Companies Act and is
required to have at least three entrepreneurs / business units which would
be independent of each other with no common directors.
A minimum of 26% of equity of the SPV should be held by food
processor(s) within the SPV. The combined net worth of the shareholders

of the SPV should be minimum `50 crore with food processor(s) having at
least of ` 10 crore of net worth . Government agencies can become
shareholders and they can have maximum 26% share capital, so that
SPVs private sector character is maintained. The SPVs need to bring in at
least 20% of the project cost, including the cost of land, as their
Outcomes of the Mega Food Parks Each Mega Food Park Promises the
following: Benefit to 6000 farmers / producers directly and 25000-30000
farmers indirectly Estimated investment is around Rs. 100 Crore and
additional investment potential is around Rs. 250 Crore. Estimated annual
turnover of Rs. 500 Crore. Each project has potential of establishment of
30-40 food processing industries. Who will arrange land? Land for the
project shall be purchased / arranged by the SPV. The registered value of
such land would be taken as part of the project cost and contribution/share
of the SPV. The GOI grant shall not be used for procurement of land and
will be 50% of non-land component of the project.
Role of state government
Providing assistance to SPVs in procurement of suitable land.
Providing all the requisite clearances, wherever needed, for setting
up the MFP and its components thereof and providing the necessary
assistance for Power, Water, Approach roads and other external
infrastructure to the project .
Providing flexible and conducive labour environment and consider
special facilities like exemption of stamp duty, VAT/Sales Tax
exemption etc. for the MFP and the units located in the MFP
Providing a fast track single window agency to facilitate clearances
and permissions required for the project.
The Mega Food Parks Scheme aims to provide excellent infrastructure
facilities for food processing industries along the value chain from the farm
to the market.