TS Food Processing

“To harness maximum value from our rich Agri-food, aqua, poultry & livestock resources for our producers, farmers and consumers by providing world class ecosystem for moving, trading and processing food products”

The objectives of the policy are as follows:

  1. Drive the national objective of doubling farmer income by 2022
  2. Build capacity for processing major commodities up to international standards
  3. Develop clusters with collaboration between government, industry and academia
  4. Establish state’s reputation for reliable high quality agri-food produce
  5. Position Telangana as agri-food distribution hub for the country

Ministry of food processing industries, Government of India has targeted to increase the aggregate levels of food processing in the country from 10% to 20% by 2020 and to increase the fixed capital base of food processing industries in India by five folds over the next ten years. Keeping in line with the central ministry targets, the policy aims to achieve the following outcomes from the food processing policy:

  1. Generate employment for 1,25,000 personnel by 2022
  2. Addition of more than 10,000 crores to state GSDP through food processing sector by 2022
  3. Increase the fixed capital base of food processing industry by at least 10,000 crores by 2022

In order to achieve the aforementioned targets, the following action plan is proposed in the policy:

  1. Creation, modernization and expansion of small and medium food processing units
  2. Development of processing clusters for key commodities in the state
  3. Development of new food parks and promotion of food parks
  4. Development of logistics and supply chain infrastructure for food produce distribution
  5. Support for mega projects in food processing industry
  6. Promotion of innovation and adoption of industry best practices

Since, the food processing industries is part of the overall industrial policy framework of the state, other critical issues relating to the sector such as logistics support, retail infrastructure for food products, renewable energy support etc. are being covered by dedicated subject oriented policies. Central and state schemes on agriculture, fisheries, animal husbandry and dairy continue to support production and improve trade efficiencies through agricultural marketing reforms, promotion of better technology and agricultural practices, cooperation and skill development. All policies collectively strive towards the national goal of doubling farmer’s income by 2022 and achieving food security for all.

MAJOR PROVISIONS AND AREAS OF SUPPORT

The policy provides capital and operational assistance to existing and new units along with providing hard and soft infrastructure support to the sector with the following schemes:

  1. Creation, modernization and expansion of food processing units
  2. Development of processing clusters in the state
  3. Development of new food parks and promotion of new and existing food parks
  4. Development of logistics and supply chain infrastructure for food produce
  5. On farm infrastructure for primary processing and preservation
  6. Promotion of innovation and adoption of industry best practices

 

CREATION, MODERNIZATION AND EXPANSION OF FOOD PROCESSING UNITS

Government of Telangana would incentivize development of new food processing units as well as modernization and expansion of existing food processing units in the state.

Scheme provisions are as follows:

  1. Grant-in-aid of 35% of project cost up to 4 crores
  2. Interest subsidy on term loan in excess of 3% pa up to maximum 9% pa for 5 years with maximum limit of Rs. 2 crores (cumulative) subjected to
  • Uninterrupted compliance to best practice certifications such as HACCP, BRC etc. as applicable. List of applicable certifications would be released in detailed policy guidelines.
  • Procurement of more than 75% of raw material from local farmers/producers
  • Annual capacity utilization of at least 35% of the installed base
  • Micro-nutrient fortification, if applicable to the product
  1. 100% exemption from APMC fee for procurement of agriculture/ horticulture produce directly from farmers by food processing units
  2. Food processing industry would be granted the status of a seasonal industry and would be eligible to get relief from minimum electricity demand charges during the closure period
  3. Food processing industries will be eligible for electricity duty exemption for captive power plants for self use for a period of 5 years from commencement of commercial operation

Eligible projects for this scheme would include:

All food processing industries except rice mills (except solvent extracted oil mills linked to rice bran), aerated water units, ice-factories not linked to food processing, packaged drinking water units, soft drinks units, pan masala units and traditional jaggery units.

Eligible applicants include:

All units promoted by joint ventures, farmer producer organizations (FPOs), cooperatives, NGOs, SHGs, local bodies, boards under government, public sector undertakings, private companies and individual proprietorship firms with appropriate land

DEVELOPMENT OF PROCESSING CLUSTERS IN THE STATE

Government of Telangana would identify key clusters in the state and develop the necessary ecosys tem for food processing in these clusters. Cluster development would be driven in each identified cluster through a dedicated SPV, formed in collaboration with members from government, industry, academia and research institutions. Government will provide grant to cover all costs required to setup the cluster SPVs infrastructure. Each cluster SPV will get a seed fund to s tart their operations in the first year of their incorporation. Cluster development SPV could take up the following activities

 

  1. Setup and run a demonstration facility with world class technology and industry practices to produce and market processed food items for promotional purposes.
  2. T rain farmers, producers and traders in best practices related to production, handling, packaging, processing and marketing of processed food items
  3. Enable technology transfer and improved access to process able varieties to producer s
  4. Facilitate interactions between FPOs and PMOs and offer services such as consultancy services, market intelligence, legal assistance etc. to farmers and FPOs
  5. Identify opportunities for the cluster and recommend potential projects to be taken up under public private partnerships
  6. Evaluate industry proposals for availing cluster scheme benefits and recommend eligible proposals for consideration

The Government will identify projects under PPP arrangement for development of anchor food processing units, testing facilities, storage and trading infrastructure, was te processing facilities, skilling centres, attached terminal market yards, research facilities etc.

  • Units developed in the identified cluster would be eligible for grant-in-aid of 35% of project cost up to Rs. 10 crores
  • Interest subsidy on term loan in e x cess of 3% pa up to maximum 9% pa for 5 years with maximum limit of Rs. 2 crores (cumulative) subjected t o
  • Uninterrupted compliance to best practice certifications such as HA CCP, BRC etc. as applicable. Details would be released in policy guidelines
  • Procurement of more than 75% of raw material from local farmers/producers
  • Annual capacity utilization of at least 35% of the installed base
  • Micronutrient fortification, if applicable to the product

Units established in the identified cluster would be eligible for an additional electricity rebate of Re 1 per unit via reimbursement over and above the rates as per T-IDEA scheme for a period of 5 years from the date of commencement of commercial operations

A state level approval committee (SLAC) will be formed under the chairmanship of Chief secretary and members from all concerned departments such as Agriculture, Animal husbandry, horticulture, and finance departments to ac cord approvals for recognizing the clusters, the constitution of the board of directors of the respective cluster development SPVs and the seed money to be granted to the cluster SPV

Government could identify following clusters:

Concept clusters: cluster for exports, super-foods cluster for healthy foods, Organic food cluster, HALAL cluster for HALAL certified produce etc. Commodity clusters: turmeric, chillies, maize, dairy, meat, inland fishes, fruits and vegetables etc.

DEVELOPMENT OF NEW FOOD PARKS AND PROMOTION OF NEW AND EXISTING FOOD PARKS

Government would also support food parks with capital subsidy of 50%. The maximum limit of the grant will be evaluated on a pro-rata basis at the rate of Rs. 1 crore per acre subjected to an upper cap of 50 crores depending upon land size for areas where such project would enable development of a crucial cluster.

To promote food processing units to come up in the new and existing food parks, Additional Re.1 per unit rebate on electricity for a period of 5 years from the date of commencement of commercial operations. This benefit will be applicable to units availing assistance under KISAN SAMPADA yojana by ministry of food processing industries, government of India

DEVELOPMENT OF LOGISTICS AND SUPPLY CHAIN INFRASTRUCTURE FOR FOOD PRODUCE

Government of Telangana would facilitate improved handling, transportation, storage and preservation of perishables in the state based on detailed mapping of the value chain of perishables.

Scheme provisions are as follows:

  1. Government will identify appropriate land in strategic locations for aggregation and distribution hub for development of storage infrastructure under PPP model
  2. Grant-in-aid of 35% of project cost up to Rs. 10 crores for silos, warehouses, pack-houses, cold storage, pre-cooling units etc. in identified areas
  3. Grant-in-aid of 50% up to Rs. 10 crores for frozen storage, deep freezers, vapours treatment facilities and irradiation facilities

 SUPPORT FOR MEGA PROJECTS IN FOOD PROCESSING INDUSTRIES

In order to promote mega projects which bring in technology expertise and extensive backward and forward linkages, any project with net capital investment in plant and machinery more than Rs. 100 crore or providing employment to more than 1,500will be considered a Mega project. These projects will be eligible for tailor made incentives as per the provisions of Telangana state industrial policy.

PROMOTION OF INNOVATION AND ADOPTION OF INDUSTRY BEST PRACTICES

Government would promote entrepreneurship and collaboration between industry and academia to accelerate innovation and adoption of industry best practices.

  1. Government of Telangana would establish a revolving venture capital fund to promote innovation and entrepreneurship in the Agri-food space.
  2. All food processing units and preservation facilities would be eligible for 50% grant up to Rs. 5 lacs for participating in domestic and global best practice certifications subjected to uninterrupted compliance to certification requirements. List of eligible certifications would be mentioned in the detailed guidelines.
  3. Government would promote annual event in Hyderabad for exhibition of world class innovations, best practices and technology in agri-food space with free participation for industries availing state and central schemes