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Mega Food Park

Mega Food Park

Mega Food Park

The Mega Food Park scheme offers a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers. This leads to maximized value addition, minimized wastage, increased farmers income and creation of employment opportunities in rural sectors. The scheme is based on the cluster approach and consists of supply chain infrastructures such as collection centres, primary processing centres, central processing centres, cold chain facilities and 25-30 completely developed plots for entrepreneurs to establish food processing units. In this article, let us take a look at the components of the Mega Food Park scheme.

Food Park Implementation

The Mega Food Park project is implemented using a Special Purpose Vehicle (SPV) that is registered under the Corporate body of the Companies Act.  The State Government and its entities are not required to form a separate SPV to implement Mega Food Park project.

Project Components

The scheme strives to establish a strong food processing industry with an efficient supply chain including Collection Centres (CCs), Primary Processing Centres (PPCs), Central Processing Center (CPC) and Cold Chain Infrastructure.

  • Collection Centres and Primary Processing Centres (PPCs): This component facilitates cleaning, grading, sorting and packing, dry warehouses, specialized cold stores that include pre-cooling chambers, ripening chambers, reefer vans, mobile pre-coolers, mobile collection vans, etc.
  • Central Processing Centers (CPC): This includes common facilities such as testing laboratory, cleaning, grading, sorting and packing facilities that include controlled atmosphere chambers, pressure ventilators, variable humidity stores, cold chain infrastructure including reefer vans, irradiation facilities, steam sterilization units, steam generating units, packaging unit, food incubation cum development centres etc.
  • The land required to set up CPC is 50-100 acres (approx.), taking into consideration the business plan that tends to differ from one region to another. The land required to establish PPCs and CCs at various locations would be in addition to the area that is needed to set up CPC.
  • Every project comprises of 25-30 food processing units with a collective investment of Rs. 250 crore that gives an annual turnover of Rs. 450-500 crore, along with the creation of direct/indirect employment of 5000 individuals. A total of 25000 farmers would be benefited on complete operation of each MFP.

Assistance Pattern

  • The scheme provides a capital grant at the rate of 50% of the eligible project cost in general areas, and 75% of suitable project cost in North Eastern regions namely Sikkim, Jammu and Kashmir, Himachal Pradesh, Uttarakhand and ITDP notified areas of the States that are subjected to a maximum of Rs. 50 Crore per project.
  • Appropriate project costs are defined as total project cost, by not considering the land cost, pre-operative expenses and margin money for working capital. On the other hand, Interest During Construction (IDC) as a part of the pre-operative payment and fee to Project Management Consultant (PMC) up to 2% of the approved grant will be considered for eligible project costs.
  • For the speedy implementation of the projects, the Ministry appoints a Program Management Agency (PMA) to provide capacity building, management, coordination and monitoring support. A separate amount, which is to the extent of 5% of the overall grants, is allocated to meet the cost of the activities conducted by the Ministry.

Release of Grant

The grant-in-aid of the scheme is released in four instalments: 30%, 30%, 20% and 20%, considering other specifications of the scheme.

  • The first instalment of 30% of the total grant under the scheme is released, after ensuring the expenditure of at least 10% of the eligible project cost on the project components.
  • The second instalment of 30% of the approved grant assistance is released after proportionate expenditure by SPV from the term loan and equity equivalent to the grant amount that has been released as the first instalment.
  • The third instalment of 20% of the approved grant assistance is released after proportionate expenditure by SPV from the term loan and equity equivalent to the grant amount that has been released as the second instalment.
  • The fourth and the final instalment of 20% of the approved assistance is released once the project is completed and the operation commences.