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Dismal performance of agri-export zones: Assocham

Dismal performance of agri-export zones: Assocham
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First Published: Thu, May 03 2007. 05 32 PM IST

Updated: Thu, May 03 2007. 05 32 PM IST
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 onRs.Agri 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 Rs. 5316.31 crore against the targeted level of Rs. 11821.47 crore. AEZs could attract only Rs 820.08 crore worth of investment against the envisaged investment limit of Rs. 1717.95 crore. The highlights of the report have been given below sector wise and the detailed report is attached separately.
* 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 Rs 619.38 while its export realization was to the tune of Rs 1138.49 crore with projected investments of Rs 52.23 crore which in reality attracted investments worth Rs 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 Rs 601.10 crore. In actual, this AEZ realized export proceedings to the tune of Rs 1051.15 crore with actual investments of Rs 365.3 crore against targeted investment of Rs 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 Rs 10 crore, but exports from the zone are nil as per records against envisaged amount of Rs 29.91 crore.
* AEZs for organic pineapples in Tripura are yet to take off. An investment of Rs 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 Rs 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 Rs 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 Rs 54.5 crore and exports are worth Rs 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 Rs 4.71 crore compared to the foreseen amount of Rs. 86.43 crore. Exports too have been worth Rs. 21 crore against the projections of Rs. 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 Rs 5.27 crore against the anticipated figure of Rs 23.30 crore. According to projections, investment of Rs 23.30 crore were expected to lead to exports of Rs 2340 crore that is more than 100 times.
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First Published: Thu, May 03 2007. 05 32 PM IST