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Business News/ Politics / News/  Dismal performance of agri-export zones: Assocham
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Dismal performance of agri-export zones: Assocham

Dismal performance of agri-export zones: Assocham

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New Delhi: Out of 60 notified Agri Export Zones (AEZs), 54 have not been able to achieve envisaged export and investments targets since 2001. This has led to over 50% shortfall in export and investment proceeds in all the AEZs.

This was part of the findings of a study brought out by Assocham onAgri Export Zones’ which confirmed the dismal performance of 54 AEZs over the last six years.

According to the document, export proceeds out of 60 AEZs amounted to only 5316.31 crore against the targeted level of 11821.47 crore. AEZs could attract only 820.08 crore worth of investment against the envisaged investment limit of 1717.95 crore. The highlights of the report have been given below sector wise and the detailed report is attached separately.

Highlights

* Despite 60 sanctioned and subsequently notified AEZs, the central government received additional 34 proposals for setting up such AEZs in the last two years.

* 54 AEZs have not been able to meet envisaged export/ investment targets.

* Karnataka AEZ which processed gherkins, rose, onion, flowers and vanilla had envisaged export proceedings of 619.38 while its export realization was to the tune of 1138.49 crore with projected investments of 52.23 crore which in reality attracted investments worth 91.04 crore until January 2007.

*Maharahstra AEZ processed grape and grapewine, mango, kesar mango, flowers, onions, pomegrante, banana and oranges envisaged export proceedings up to 601.10 crore. In actual, this AEZ realized export proceedings to the tune of 1051.15 crore with actual investments of 365.3 crore against targeted investment of 270.65 crore.

*Zone wise appraisal of few AEZs reveal that AEZ for orange in Madhya Pradesh covers Chhindwara Hoshangabad and Betul. Vegetables have been added in the AEZ of oranges vide notification of DGFT in November 2006. This zone attracted a major part of its expected investment of 10 crore, but exports from the zone are nil as per records against envisaged amount of 29.91 crore.

* AEZs for organic pineapples in Tripura are yet to take off. An investment of 7.62 crore has been made in the zone. The problem here is that exports have to be come in via Calcutta which reduces cost competitiveness.

* Other zones with zero exports and small investments are mango zone in Tamil Nadu, flowers zone in Sikkim and basmati rice zone in Uttar Pradesh. MoUs for these zones were signed in February 2003, August 2002 and March 2003 respectively.

* The AEZ of ginger and turmeric covering Kandhamal district of Orissa has achieved the export target of close to 1.76 crore without any recorded investment. Funds however have flown into the zone, but there is no official record.

* A zone in Uttrakhand has so far recorded an export of 1 crore with investments yet to be ascertained. Medicinal and aromatic plants come from the districts of Uttakashi, Chamoli, Pithoragarh, Dehradun and Nainital.

* Pineapple zone in West Bengal has reported investments of 54.5 crore and exports are worth 0.2 crore. The investment figure includes cost of the processing units present in the zone.

* Investment in AEZs meant for premium products like basmati rice is negligible and Darjeeling tea is zero. India is the leading producer of tea, but has only one zone attributed to tea which is in Darjeeling. It was approved in September 2004 and due to lack of consensus between the Central and State Government MoU is still awaited. There are only two zones dealing with spices, the above mentioned cherry pepper zone and seed spices zone of Madhya Pradesh.

* Another premium product zone of durum wheat in Madhya Pradesh has realized an accounted investment of only 4.71 crore compared to the foreseen amount of 86.43 crore. Exports too have been worth 21 crore against the projections of 1155 crore. The Minimum Support Price offered by the government is more than what exports fetch.

* There are six flower zones in the country, out of which one caters to cherry pepper which is yet to be exported. Major cause of concern is that while actual outlay has exceeded projected investments by a huge margin, exports are barely 10% of estimations and a large untapped market potential for flowers in international market remains.

The study concludes that Punjab has three AEZs: vegetables, potatoes and basmati rice. So far Basmati zone has drawn investment of close to 5.27 crore against the anticipated figure of 23.30 crore. According to projections, investment of 23.30 crore were expected to lead to exports of 2340 crore that is more than 100 times.

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Published: 03 May 2007, 05:32 PM IST
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