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Suresh P. Iyengar

Mumbai, Nov 13 In a bid to bail out the food processing industry from the current financial crisis, the Government has allocated Rs 1,000 crore to the National Bank for Agriculture and Rural Development (Nabard).

Nabard will utilise the fund to refinance banks that lend to the food processing sector.

“Banks have been advised to provide loans for the fast emerging food processing sector and if need arises, it can reimburse the loan portfolio from Nabard,” Mr Subodh Kant Sahai, Minister of State for Food Processing Industries, said on the sidelines of Foodworld India 2008 – Global convention on Food Business & Industry, organised by the Federation of Indian Chambers of Commerce and Industry.

Despite the turbulent economic condition, the Union Government has received 40 applications for setting up 10 integrated mega food parks - from procurement, cold chain, processing and packaging.

The food parks being planned in remote villages will be in addition to 56 food parks in operation in various states.

“The mega food parks will be located on the basis of the agriculture and horticulture surplus available.

“A maximum grant of Rs 50 crore will be provided by the Union Government to each mega food park,” he said.

Expressing concern over the sharp rise in prices of packaging material, Mr Sahai said the Government was apprised of the development and concessions are being planned.

“The Ministry of Finance is worried that the sops on packaging material provided for the food processing industry may be misused.

“It is an administrative issue which is being tackled at the highest level,” he said.

The Government wants to support the food processing industry as it indirectly empowers 75 per cent of the population involved in farming.

The boom in retail sector will enable farmers to get better returns, he said.

Now farmers are left with little money to reinvest in farming as realisations are very low and input costs high.

“I do not understand what the harm is if a farmer realises $40 a quintal from exports of tomato, particularly when he cannot get that price in the domestic market,” said Mr Sahai.

To meet the high standards of the international markets, the Government has offered 50 per cent subsidiary to private companies, which set up quality testing laboratories and 100 per cent subsidiary for state governments that install new testing laboratories, he said.

More Stories on : Farm credit | Foods & Food Processing | Credit Market

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