Developing NE as food processing hub

Amit Saha

(The author is an Assistant Professor of Commerce in Assam Don Bosco University and can be contacted at amitsahaghy@gmail.com)

The north-eastern region of India is a treasure trove with unexplored beauty and untapped opportunities. The hill terrains and the Barak-Brahmaputra valleys consist of soil which is not only fertile but also organic by default. The climate in this region is suitable for several exotic crops and is one of the richest bio-diversity zones in the country. Yet when it comes to the basic amenities, employment and industrial development, this region lags far behind the western states of the country. Be it structural or incidental, this region has visibly failed to live up to its capacity to harness its resources and be the forerunner in the race of economic growth and development. Being an agrarian economy, only around 60% of the total cultivable area is utilised in Northeast India as compared to a national average of more than 75% as per reports of North Eastern Regional Agricultural Marketing Corporation Limited. The north-eastern region also enjoys a strategic geographical advantage as it is naturally the gateway to the South East Asian countries but it contributes only around 3% of the country's GDP.

Among many other opportunities, food processing is very popularly seen as a profitable area for investment in this region. As per reports of National Investment Promotion and Facilitation Agency, food processing shares 32% in Indian Food Market providing 11% of total employment and around 10% of total exports. The north-eastern region already boasts itself in the production of several crops which have a high export potential. According to Agricultural & Processed Food Products Export Development Authority (APEDA), several products have a high export potential in NER such as orange, lemon, pineapple, kiwi, rice, banana, chilli, cut flowers, ginger and jackfruit. The Bhut Jolokiya or Ghost Chilli is famous all across the world as the hottest chilli. Assam is already the global tea hub which contributes to more than 50% of the country's total tea production. In addition to that more than 100 species of bamboo are naturally found in this region. This region is also home to many medicinal and aromatic plants which has a significant economic value. Sustainable production of such medicinal plants can be promoted on a commercial scale through adoption of sustainable biotechnological interventions. During the recently conducted "North East Food Show 2019" it was announced that the Union Government has undertaken several initiatives to increase the food production, encourage the farmers and promote food processing industries. The Union Government has also proposed to provide 75 per cent subsidy to entrepreneurs to set up food based industries in North East India. Out of 42 Mega Food Parks to be set up all across the country, 6 of them are in the north-eastern region.

The food processing sector is one of the priority sectors under the "Make in India" initiative. In order to attract investment to this sector, the Ministry of Food Processing Industry has implemented several schemes for development of infrastructure for promoting the food processing industries. Several Mega Food Parks with better facilities of roads, electricity, water supply and common processing facility like packaging, cold storage, dry storage and logistics are being promoted in those designated areas. These Mega Food Parks provide developed factory sheds to entrepreneurs on long-term lease where they can set up food processing units in "plug and play model". Two such projects in Assam (Nalbari) and Tripura (Tulakona) each are already operational in this region.

The scheme of Pradhan Mantri Kisan Sampada Yojana (PMKSY) has introduced many benefits to entrepreneurs in the food processing sector. 'Nivesh Bandhu' is a dedicated investor's portal to assist potential investors in taking informed decision in the food processing sector. A special fund of Rs. 2,000 crore has also been set up in National Bank for Agriculture and Rural Development (NABARD) to provide credit at affordable rates to entities in the food processing sector. This loan is extendable to individual entrepreneurs, cooperative societies, farmers' producer organizations, companies, joint ventures and entities promoted by the Government for setting up, modernization, expansion of food processing units and also development of infrastructure in designated food parks. In addition to that, there is a deduction of 100% of the profits and gains derived from the business of processing, preservation and packaging of fruits or vegetables or meat and meat products or poultry or marine or dairy products or from the integrated business of handling, storage and transportation of food grains for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent or more subject to certain conditions.

However, in spite of these benefits and the existing opportunities this region has continuously failed in this regard. One of the primary reasons is the lack of capital base and entrepreneurial initiative. But, with the government coming forward with different schemes for financial assistance, it is time the people not missed this opportunity to uphold the glory of this region. The food parks are dedicated zones for development of food processing units. The local youth must try their hand and try to uplift the social scenario. These industries will lead to the development of several ancillary industries and subsequently more industries. There is a need for a farmer's revolution which is only possible with awareness programmes into deep rural areas for increased production and simultaneous improvement in logistics and other infrastructure. It is unfortunate that the region which is blessed with immense potential has to limp with unemployment and poverty. The north-eastern region has the opportunity to develop as the true gateway to the South East Asia and flourish with trade and commerce.