New Delhi: Agri-export zones, the government’s showcase for improving flagging agricultural output, have failed to take off as anticipated, underpinned by poor investments and infrastructure, according to a study by industry lobby Associated Chambers of Commerce and Industry (Assocham).
The exports and investments in the 59 operational agri-export zones have fallen short of their target by more than 50%. Between 2001 and 2006, exports stood at Rs5,316.31 crore, 55.2% short of the estimated export targets of Rs11,821.47 crore. Investments in the zones fell short of the target by 110% at Rs820.08 crore compared with the targeted investment of Rs1,717.95 crore during 2001-2006.
The only exception to this are some agri-export zones in Karnataka, West Bengal, Punjab and Maharashtra, which have exceeded their export and investment targets. “The zones that are doing well are performing due to demand in the market,” the Assocham study said.
The study is based on the status report of agri-export zones brought out by the Agricultural and Processed Food Products Export Development Authority in January 2007.
Agri-export zones were set up for sorting to processing and shipping out of farm produce for exports. The main exports from these zones are food grains, nuts and seeds, meat, poultry and dairy products, processed foods, tobacco, tea and coffee. The government has sanctioned 60 agri-export zones till now, out of which 59 are operational.
Assocham’s study attributes the shortfall to red tape that involves getting a series of clearances from several government agencies and inadequate infrastructure within the zones.
The “corporate sector has not come forward to invest in these zones because of institutional hurdles such as bureaucracy and red-tapism,’’ said Sushil Kumar, professor of agri-business, Indian Institute of Management at Lucknow. “Also, we do not have good-quality technology to process food, which could have resulted in shortfall in exports.”
Given the dismal performance of the agri-export zones, in January 2007, the government decided to put proposals for setting up new agri-export zones on hold. It has asked state governments to reconsider all the proposals pending with them. The government wants to strengthen the existing zones before it gives its nod for new zones.
“Fresh proposals for agri-export zones have been kept in abeyance,” said Harpal Singh, deputy general manager, Agricultural and Processed Food Products Export Development Authority.
In the last two years, the Central government has received 34 fresh proposals for setting up agri-export zones. These proposals are awaiting approval.