Agri Export Zones

Agri Export Zones

Presented byRishika Mittal (09020242030)

Sachin Lakade (09020242032)Sadanand Kadam (09020242033)

Saurabh Walke (09020242034)Yogesh Sharma (09020242035)

Susrita Sen (09020242036)Raj Saxena (09020242037)

MBA- AB

2009 – 2011

Symbiosis Institute of International Business

The Concept of Agri Export Zone • Under chapter 16 of Exim Policy 2001, a new concept of

Agri Export Zone (AEZ) has been inserted by Govt. of India on 11.05.2002 and its valid till 11.05.2012.

• An Agri Export Zone or AEZ is a specific geographic region in a country demarcated for setting up agri based processing industries, mainly for export.

• The term is widely used mainly in India.

• APEDA has been nominated as the Nodal Agency to coordinate the efforts on the part of Central Govt. negotiations.

The Concept of Agri Export Zone • The concept of agri export zone thus attempts to take a

comprehensive look at a particular produce/product located in a contiguous area for the purpose of developing and sourcing the raw materials, their processing/packaging, leading to final exports.

Need for AEZ

• Lack of adequate storage facilities.

• Lack of suitable processing.

• Lack of promotion of products.

• Lack of marketing,

• To overcome all this barriers with the help of APEDA ,AEZ was launched..

Objective

In a fast changing international trade environment and with a view to providing

remunerative returns to the farming community in a sustained manner, efforts will be made to provide improved access to the produce/

products of the Agriculture and Allied sectors in the international market.

Measures envisaged to promote exports from AEZ

i. Financial Assistance

ii. Fiscal Incentives

Financial Assistance

• Both Central as well as State Government and their agencies are providing a variety of financial assistance to various agri export related activities.

• These extend from providing financial assistance for Training and Extension, R&D, Quality Upgradation, Infrastructure and Marketing etc.

• All these facilities would have to be dovetailed and extended to promote agri exports from the proposed Zones in a coordinated manner.

• Some additional features like providing grants from Market Access Initiative fund could also be considered.

Fiscal Incentives• The benefits under Export Promotion Capital Goods Scheme, which were

available only to direct exporters, have now been extended to service exporters in the AEZ.

• Service provided to ultimate exporters will be eligible for import of capital goods at a concessional duty for setting up of common facilities.

• They shall fulfil their export obligation through receipt of foreign exchange from ultimate exporters who shall make the payments from their EEFC account.

• Exporters of value added agri products will be eligible for sourcing duty free fuel for generation of power, provided the cost component of power in the ultimate product is 10% or more and the input-output norms are fixed by the advance licencing committee of the DGFT.

• Similarly, input-output norms can also be fixed for sourcing other inputs, like fertilizer, pesticides etc. duty free for cultivation purpose.

India’s export contribution

Anticipated benefitsi. Strengthening of backward linkages with a market oriented approach.

ii. Product acceptability and its competitiveness abroad as well as in the domestic market.

iii. Value addition to basic agricultural produce.

iv. Bring down cost of production through economy of scale.

v. Better price for agricultural produce.

vi. Improvement in product quality and packaging.

vii. Promote trade related research and development.

viii. Increase employment opportunities.

Operation of the Concept • The entire approach of promoting the Agri Export Zone

would have to be taken on a project mode.

• The State Governments would need to identify potential export products which could be selected for development with a cluster approach.

• The States will forward such project proposals to APEDA which will conduct the initial scrutiny of the proposals.

• If found feasible ,APEDA may provide necessary guidance in preparing the detailed project report.

Operation of the Concept • This report, after preliminary scrutiny, will be placed

before the Steering Committee which has been constituted under the chairmanship of Commerce Secretary with the following members:

– Director General of Foreign Trade, Member – Joint Secretary (EP Agri Division, DOC) Member – Joint Secretary (Deptt. of F.P.I.,MOA) Member – Joint Secretary [Infrastructure Division, DOC] Member – Executive Director , NHB Member – Representative of DG, ICAR Member – Director (Finance, Deptt. of Commerce) Member – Chairman, APEDA Convenor

Operation of the Concept

• Once the project proposal of a State has been approved by the Committee, an MOU would be signed between APEDA (on behalf of the Central Government) and the State Government for providing possible assistance at each stage of the project.

• The responsibilities of the State government would also be defined in the MOU, a draft of which is under preparation.

Guidelines for State Governments • Identification of a agricultural produce (cash crop) which would be developed

for export through a cluster approach.

• This would, obviously, be based on concentration of production of a given product or a set of products in a particular area which could be promoted as an Agri Export Zone.

• The Zone could be a block/group of blocks or a district/group of districts.

• An Agricultural University would need to be identified which will assist in the R&D work relating to development of the project. Such University should preferably be in the vicinity of the Zone.

• In case of horticulture based projects, an exporter should be identified who would source produce from 100-200 orchards in a contiguous area. In case there are more exporters/ farmers interested in exports, then a single pack house operator or a processing unit to serve the exporters/farmers may be identified.

Guidelines for State Governments • Efforts should be made to ensure enough production

crops to enable the unit to run round the year.

• The proposal should indicate the entire range of activities involved in the process, list out interventions being provided by the State Governments at different levels and also suggest the facilitations that can be provided by the Central Government. Interventions from the Centre could be, inter-alia in areas of feasibility studies, setting up backward linkages, training and extension, pre and post harvest activity, packaging, transportation, market promotion, etc.

Responsibilities of the State Government

i. Identification of a State Government institutions/agency which will be responsible for implementation and coordination of the entire activity.

ii. Single window problem solving desks should be created in the offices promoting zonal approach to agriculture exports.

iii. Adequate availability of infrastructure, inputs, electricity, etc.

iv. Redeployment of extension officers in the Export Zones who would interact regularly with APEDA and organise training/activity on a regular basis with a definite action programme.

EPCG Scheme

• Agriculture exporters shall be eligible for the facility of EPCG scheme as described in Chapter-6 of the Policy.

• The licence holder shall not be required to maintain the average level of exports

• Exporter shall have the facility to move or to shift the capital goods within the zone, provided he maintains accurate record of such movements.

• Such equipments shall not be sold or leased by the licence holder.

• This facility shall also be available to service providers, setting up common infrastructural facilities such as sorting, grading, polishing, packaging, cold storage, transport equipment/ refrigerated vans, vapour treatment heat treatment plant, X-ray screening facility etc.

Status The agri exporter shall be eligible for

recognition as Export House/Trading House/Star Trading House/ Super Star Trading House on achieving the performance level as mentioned next slide

StatusCategory Average FOB value

during the preceding three licensing years, in Rupees

FOB value during the preceding licensing year, in Rupees

Average NFE earnings made during the preceding three licensing years, in Rupees

NFE earned during the preceding licensing year, in Rupees

(1) (2) (3) (4) (5)

EXPORT HOUSE

4 crores 6 crores 3 crores 5 crores

TRADING HOUSE


STAR TRADING HOUSE


SUPER STAR TRADING HOUSE


Information Requirements

A database on agricultural products and markets including aspects of commercial intelligence relevant to exports will be established. Assistance shall be provided to the exporters, growers’ organisations, trade association for conducting surveys/ feasibility studies, market studies etc

Schemes OF APEDA• Schemes for Market Development

Components Scale of Assistance

1. Activity for development of packaging standards and design.

Maximum amount in case ofsharing with exporters / organization is Rs.5 lakhs

2. Assistance to exporters for use of packaging material as per standards and specifications developed or adopted byAPEDA.

30% subject to ceiling of Rs.1.50 lakhs perbeneficiary.

3. Development and dissemination ofmarket information data base on products, infrastructure, markets and pre-feasibility surveys / study etc.

100% to be implemented by APEDA

Schemes for Market Development

Assistance to exporters, growersorganizations, trade associations forconducting surveys, feasibility studies etc.

50% of the total cost subject to ceiling of Rs.2.00 lakhs per beneficiary.

Supply of material samples, productliterature, development of web siteadvertisement etc, for publicity and market promotion for fairs / events organised / sponsored by APEDA.

100% of the cost


Schemes For Development of InfrastructureComponents Scale of Assistance

Establishment of common infrastructurefacilities by APEDA or any other Government or Public Sector agency like Airport Authority of India or Port Trust etc.

100% grant-in-aid

Assistance for purchase of specialisedtransport units for animal products horticulture and floriculture sector.

25% of the cost subject to a ceiling of Rs.2.50 lakhs per beneficiary.

Mechanisation of harvest operation of theproduce.

25% of the cost subject to a ceiling of Rs.5.00 lakhs per beneficiary

Setting up of sheds for intermediatestorage, grading, cleaning & ripeningoperation of produce.

25% of the cost of equipment subject to aceiling of Rs.5.00 lakhs per beneficiary

Schemes For Development of Infrastructure

Setting up of pre cooling facilities etc.with proper air handling system/ coldstorage for storing the produce


Providing facilities for pre-shipmenttreatment such as fumigation, X-rayscreening, hot water dip treatment, Watersoftening Plant


Assistance for setting up of environmentcontrol system e.g. pollution control,effluent treatment etc.

25% of the cost subject to a ceiling of Rs.25 lakhs per beneficiary


Schemes for Quality DevelopmentComponents Scale of Assistance

Assistance to exporters, producers,trade associations, public institutions etc. for setting up / strengthening laboratories.

50% of the total cost subject to a ceiling of Rs.5 lakhs per beneficiary.

Upgradation and recognition of labs forexport testing.

For upgradation upto 50% of cost for private labs and upto 100% of the cost for Central /State Government / University laboratories subject to a maximum of Rs.50 lakhs.

Assistance to exporters & producers forinstalling quality management, qualityassurance and quality control system such as ISO series, HACCP, TQM etc. includingconsultancy, quality improvement andcertification for these.

50% of the cost subject to a ceiling of Rs.2lakhs per beneficiary for each system

Schemes for Quality Development

Testing of water, soil residues ofpesticide, veterinary drugs, hormones, toxinscontaminants in agricultural produce /products.

50% of the cost of tests subject to a ceiling ofRs.2000 per sample. Payment shall be madedirect to laboratories and not to individualexporter.


Schemes for Research and DevelopmentComponents Scale of Assistance

Assistance to support Research anddevelopment for export efforts through R & D organizations in Government sector .

100% APEDA’s internal scheme .

Assistance to exports, Trade Associations , Cooperative institutions etc. to supportrelevant research & development for export enhancement through R & D organizations in cooperative/ private sector .

Upto 50 % of the total cost of the projectsubject to a ceiling of Rs. 10 Lakhs.

Statement Of Actual Investment And Exports From Sanctioned AEZ

State AEZ Project Actual Exports (Rs. Cr.)

Actual Investments(Rs. Cr.)

West Bengal Pineapple, Lychee, Potatos, Mango, Vegetables,

Darjeeling Tea

85.65 83.47

Karnataka Gherkins, Rose Onion, Flowers, Vanilla,

1544.79 91.04

Punjab Vegetables, Potatoes, Basmati rice,

1523.83 49.48

Uttar Pradesh Potatoes, Mangoes and Vegetables, Basmati Rice

19.96 39.32

Maharashtra Grape and grapewine, Mango (Alphonso), Kesar Mango,

Flowers, Onions, Pomegranate, Banana,

Oranges

1166.34 365.32

Andhra Pradesh Mango Pulp &Fresh Veg., Mango & Grapes,

Gherkins, Chilli

2852.59 206.88

Jammu & Kashmir

Apple, Walnuts, 676.93 20.85

March 2008

Statement Of Actual Investment And Exports From Sanctioned AEZ

State AEZ Project Actual Exports (Rs. Cr.)

Actual Investments (Rs. Cr.)

Tamil Nadu Flower, Mangoes, Cashewnut

102.29 28.78

Bihar Lychee, Vegetables & Honey

5.87 20.10

Gujarat Mango and Vegetables, Value added Onion,

Sesame Seed

302.14 30.31

Kerala Horticulture Products, Medicinal Plant

2277.79 3.10

Assam Fresh & Processed Ginger

2.17 3.15

Madhya Pradesh PotatoesOnion

Garlic, Seed Spices, Wheat, Lentil and Grams, Oranges

75.42 60.80

Rajasthan Coriander, Cumin 49.94 71.86

March 2008

Current Status of AEZ• At present, APEDA has set up 60 Agri-Export

Zones (AEZs) spread over 230 districts in 20 states.

• The total investment committed under the AEZ programme by all agencies stands at Rs.1, 724 crore, including private investments of Rs.970 crore.

• In all, 35 crops were identified for promotion in these zones.

Agri Export Zones in Maharashtra

Mango (Alphonso): Ratnagiri, Singhudurg Mango (Kesar) : Aurangabad, Jalna, Beed, Latur Ahmednagar and Nashi Grapes : Nashik, Pune, Ahmednagar, Sangli, Latur, Osmanabad Onion : Nasik, Pune, Satara, Ahmadnagar,

Orange : Amravati and Nagpur Pomegranate : Nasik, Solapur, Pune, Banana : Jalgaon, Dhule, Hingoli, Buldhana & Wardha Nanded,Parbhani,

MAHAMANGO• State has announced the creation of an AEZ (Agri Export Zone) for

Alphonso Mangoes in the Districts of Sindhudurg, Ratnagiri, Raigadh and Thane.

• The MSAMB has been named as nodal agency.• A Detailed Project Report (DPR) submitted by the MSAMB has

been approved.• GoM signed a MoU with the GoI to implement the AEZ project (on

12 February 2002). Pre-cooling, cold storage and pack house facility of Mahamango at

Kudal has been upgraded for export to China.

Maharashtra State Agricultural Marketing Board in coordination with State agricultural department, Local APMC and cooperative societies continousely arraning training and demonstration programs in rural area to increase export quality production.

• During the year 2003-04, 1656 farmers were trained in 35 one-day training programs.

• During the year 2004-05, 617 farmers were trained in 11 one day training programs.

• during the year 2005-06, 1469 farmers were trained in 22 one day training programs.In the current year 2006-07 from august 2006 onwards 115 farmers were trained . Investment- MSAMB with the help of APEDA, New Delhi and Devgad mango growers co-operative society has developed Mango export facility center at Jamsande at Nachane, dist- Ratnagiri. These both facilities have following different units-Precooling= 5 Mts.Cold storage= 25 Mts.Ripening Chamber= 5 Mts.mechanical Handling System= 1.5 Mts/hr.

NABARD Initiatives in Promotion of AEZsFinancial Initiatives:-

• NABARD has extended 100% refinance scheme to all client institutions. (CBs, RRBs, SCBs, SCARDBs with NPA not exceeding 5%)

• Minimum repayment period of 3 years for all activities in AEZs

• Preparation of crop specific credit plans for AEZs

• Sanctioned a scheme for cultivation and processing of Gherkins in Karnataka under co-financing scheme.

Promotional Initiatives• Investors conferences for Agri-Exports in four regions

along with APEDA and EXIM Bank to explore the possibilities of higher investment in agri exports by Corporate Sector.

• Inter Institutional meetings of NABARD, APEDA and EXIM Bank were held during 2002-03, 2003-04 and 2004-05 to review the progress of implementation in AEZs and to consider further policy changes.

• NABARD Regional Offices have been conducting State Level Review meetings on AEZs involving all stakeholders to address the challenges iimplementation of AEZs.

Refinance support by NABARD• Disbursement of refinance to the tune of Rs.111094 lakh

under AEZ for various crops during theperiod 2002-03 to 2005- 06

• Disbursement under AEZ since the inception of the programme is furnished below

Year Total (Amt Rs Lakh)2002-2003 4539

2003-2004 34316

2004-2005 43714

2005-2006 28525

Total from 2002 to 2006 111094

The Road Ahead• Inadequacy of infrastructure facilities in most of

the AEZs is another area,which needs immediate attention.

• NABARD can support infrastructure development projects in AEZ areas through Rural Infrastructure Development Fund.

• Promotional initiatives in the marketing of Indian crops and patenting product based on geographical indications.

THANK YOU…

Agri Export Zones

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