Mega Food Parks Supporting Transformation of Indian Agriculture

Mega Food Parks will pave the way to transform the agriculture sector and unlock its real potential though processing and value addition 

About Author: Ritwik Bahuguna – Managing Director, Farlense Group has a career spanning approximately 15 years, marked by diverse experiences in the global agribusiness and sports industries. In the last decade and a half, he has worked very closely with the Ministry of Food Processing Industries, Government of India, on drafting and updating Guidelines of flagship schemes for India’s food processing sector, such as Mega Food Parks and Integrated Cold Chain.

The food processing sector is regarded as the growth engine of the agriculture sector in India. It is thus correctly advocated that an efficient food processing sector, consistently growing at double-digit rates, is a must for the agriculture sector to grow at more than 4% and serve the ever-increasing food requirements of the country’s growing population.
It is now well-recognized by all stakeholders – governments, farmers and industry – that the fortunes of agriculture and food processing sectors are intertwined and an integrated approach is needed to address problems of food spoilage and wastage, food security, inflation and dwindling farm incomes. Various government policies of the last half a decade showcase this interdependence of food processing and agriculture.
The food production in the country is likely to double in the next decade or so. Yet at present, India accounts for less than 3 percent of international food trade, and lack of processing facilities has been leading to wastage/value loss of about 35 percent of the agricultural produce, worth 10 billion USD as per various estimates.
It is against this backdrop that the Mega Food Parks Scheme (MFPS) was launched in 2008-09, which is the flagship programme of the Union Ministry of Food Processing Industries. MFPS is also the most crucial element of the Pradhan Mantri Kisan Sampada Yojana that embodies Prime Minister Narendra Modi’s vision of doubling farmers’ incomes.
The Mega Food Parks Scheme
The primary objective of Mega Food Parks is to provide state-of-the-art facilities for food processing along the value chain from the farm to the market. At its launch, the Scheme Guidelines struck all the right chords. They would adopt a cluster-based “hub and spoke model”, with due consideration given to backward (to be read as sourcing) and forward (to be read as marketing) linkages and they would help create modern infrastructure near the farm, and provide facilities for transportation, logistics and centralized processing centres (CPC) as well as farm-proximate Primary Processing Centres (PPCs). A grant of up to Rs 50 crore per project was to be provided by the Ministry of Food Processing Industries and it was envisaged that each Mega Food Park would be completed in 30 months – which, rightly so, proved to be an excessively idealistic target.
“The data over the last 3-4 years shows that things have gradually changed for the better, with more than 50% of allotted Mega Food Parks having become operational and starting to attain gestation.”
Like all large infrastructure development projects, things were slow to take off due to a variety of reasons such as time taken in land acquisition and CLU, financial closure, environmental approvals, unfavourable SPV structuring norms in the Scheme Guidelines, and in some cases unviable locations.
As a result, by 2015-16, the Scheme was written off by many; but the time of Mega Food Parks was still to come. The Ministry too introduced two major initiatives to infuse fresh energy in the MFP Scheme –
  • Setting up a food processing fund under NABARD for providing loans at concessional rates to Food Parks and units within the Food Parks.
  • Re-launch of the CEFPPC Scheme with a grant-in-aid of up to Rs. 5 crore, with preference for food processing units established inside food parks.
Mega Food Parks Have Arrived
The data over the last 3-4 years shows that things have gradually changed for the better, with more than 50% of allotted Mega Food Parks having become operational and starting to attain gestation. There is also an accelerated growth of units being established in Mega Food Parks; and out of the 506 units approved by the MoFPI under its CEFPPC (Units) Scheme as of January 2024, close to 150 food processing units are inside Mega Food Parks sanctioned by the Ministry.

Total Mega Food Parks: 41
Operational Mega Food Parks: 24
Mega Food Parks under various stages of implementation: 17
Cumulative Project Cost: Rs. 4635.87 crore
Promoters’ contribution: Rs. 2664.74  crore
MoFPI Grant: Sanctioned Rs.1971.13 crore
Released: Rs. 1465.26 crore
Status (as of April 2023)

Transforming Indian Agriculture
The Mega Food Parks have started playing a significant role in giving a boost to the agribusiness sector and will continue to play an even more important role in the next 5-7 years. The examples are now evident and include:
  • Patanjali’s journey to become an FMCG powerhouse started with its Patanjali Mega Food Park in Haridwar. Its food products revenue is going to touch USD 1 Billion soon and it sources produce, directly and indirectly, from more than 10 lakh farmers. It has commercialized some seemingly irrelevant products such as buransh juice, helped increase farmer incomes and developed many local entrepreneurs.
  • Gujarat Agro Infrastructure Mega Food Park has already secured an investment of more than Rs. 400 crore from processors against the Ministry’s own goal of 250 crore per Mega Food Park in a tribal-dominated taluk. It is likely to attract a total investment of nearly Rs. 650 crore, with the related preservation and procurement of agricultural produce benefiting a huge number of farmers. Their fully operational storage facilities have supported scores of dairy farmers too, in addition to storage of other agricultural produce.
  • Himalayan Mega Food Park is helping apple growers in Uttarakhand with its apple juice concentrate facility, and Cremica Food Park is changing the fortunes of tomato farmers in Himachal and surrounding areas with a world-class pulping facility.
All operational food parks, including the examples above, are already sourcing a range of raw materials directly and indirectly from a minimum of about 5000-6000 farmers each. They are already contributing in a big way to reducing wastage of agri and horticulture produce, through more than 2.5 lakh MT capacity of modern cold and ambient warehousing that has been created in these projects. These storage facilities also provided logistical support and relief during the COVID lockdown too as Mega Food Parks continued to operate and offer services.
Some Mega Food Parks have encouraged and even assisted farmers in their project clusters to experiment and diversify. Many farmers have taken up horticulture for two main reasons – surety of buyback and creation of farm gate infrastructure such as packhouses and logistics support provided by the Mega Food Parks. It has been seen in various locations that FPOs, being promoted heavily by governments, have found a market for their produce in these mega food parks.
Bright Outlook
When all 41 projects are complete and fully operational with their central facilities and food processing units, more than 15 lakh farmers in these project clusters would benefit. It is evident that such support through Mega Food Parks will enthuse many more farmers and FPOs to focus on better and processable produce and food parks are already playing and shall continue to play an important role in moulding the future of India’s agriculture sector.
In the post-Covid world, global food supply chains are undergoing major realignments. Given India’s inherent strengths and renewed focus from Government, India can emerge as a major global sourcing hub and also a major consumption market, thus creating a huge opportunity for Indian businesses and start-ups. Mega Food Parks will no doubt pave the way to transform the agriculture sector and unlock its real potential though processing and value addition.

*This article was first published in March/April 2024 edition of BioVoice eMagazine.