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IDFC begins talks on agri-export zones

Our Bureau

CHENNAI, July 1

THE Infrastructure Development Finance Company (IDFC) has initiated discussions with various State Governments to set up agri-export zones (AEZs) with private sector participation, according to Mr O.K. Balraj, Vice-President and Head, Agri Division of ID FC.

The export zones mooted by the Agricultural and Processed Food Products Export Development Authority (APEDA) to increase international trade in agri-commodities are an attempt to take a holistic approach to encouraging trade in specific commodities locat ed in contiguous areas.

For instance, in Tamil Nadu, the AEZs would focus on grapes, mangoes and chikkoo, in Kerala -- vegetables, in Punjab and Haryana -- kino, wheat and rice, Karnataka -- vegetables and flowers, Maharashtra -- mangoes, grapes and flower, Gujarat -- ban anas, mango, castor and garlic, and in Uttaranchal -- litchi and medicinal plants, he said.

An integrated approach to exploiting the comparative advantages that India enjoyed in specific products was needed, he said. While the Central and State Government agencies extended facilities for agri-businesses, these had to be coordinated and extended to the AEZs. Existing projects could also be dovetailed into AEZs, he said.

Meanwhile, at a recent meeting with APEDA officials, the corporate sector has suggested measures to improve viability of AEZs. The anticipated benefits from the AEZs are strengthening of backward linkages with a market-oriented approach, product acceptab ility and competitiveness in export and domestic markets, value-addition to raw produce, economies of scale and increased employment opportunities.

The AEZ establishment will have to take on a project mode with State Governments identifying potential export products for development through a cluster approach. Project proposals could be forwarded to APEDA for feasibility studies which can be followed -up with a detailed project report to be assessed by the steering committee constituted under the Commerce Secretary.

Other than identifying the crop, some basic guidelines include identifying agricultural university, preferably in the vicinity of the AEZ, to assist in research and development; in the case of horticultural products, identifying an exporter who can sourc e products from 100-200 orchards, and if more than one exporter is involved, establishing common processing and packing facilities.

The role of State Governments and the Centre will have to be demarcated and close coordination between the two ensured. This could be through identifying agencies responsible for implementation and coordination, single window problem-solving desks, provi ding adequate infrastructure and redeploy extension officers in AEZs for human resource development.

In Tamil Nadu, a range of products and zones with potential as AEZs exist. For instance, in the Erode and Namakkal belt, poultry, tapioca cultivation and starch and sago units are major operations. In Salem and Dharmapuri, mango cultivation and processin g units are abundant. In the Theni-belt, grape cultivation has been expanded while the Cauvery delta, Kanchipuram and surrounding areas are major paddy growing areas.