Govt to rejuvenate agri export zones

With the 60 approved agri export zones (AEZs), precursors to today's dedicated export zones, not taking off as the commerce and industry ministry had planned even six years after their inception, the ministry has decided that it will focus on four zones and fund their setting up.

Talks are also on with YES Bank for three other zones, in which the ministry hopes to attract private investment. "We are fixing this. We have identified four zones "" in West Bengal, Assam, Andhra Pradesh and Sikkim "" for which we will provide funds of Rs 48.85 crore. The target is to make them functional by the end of the year," said Minister of State for Commerce Jairam Ramesh.

The funds will be provided from a scheme called Assistance to States for Infrastructure Development of Exports. 

THE CHOSEN ONES
State	Agri-Products	Investment (Rs crore)
Assam	Ginger	16.00
West Bengal	Pineapples	14.66
Andhra Pradesh	Mangoes	11.45
Sikkim	Flowers and orchids	6.74

A review by the ministry last year revealed that the zones had missed their export targets and investments were only half of the originally estimated Rs 1,700 crore.

Under the original AEZ policy, 25 per cent of the development cost was to be borne by the central government and 25 per cent by the state government, while the remaining 50 per cent of investment was the responsibility of anchor investors (private companies) that were to set up bases in the zones.

The zones are set up in agro-climatic regions that are known for a particular variety of farm produce. The infrastructure in the area, which included roads, storage, transport and other facilities, was to be developed by combining central and state schemes.

Perhaps the main reason for their failure is that agri zones do not get tax sops of the kind that SEZs enjoy. "The basic reason why AEZs did not kick off as planned was that no anchor investor was interested in them. These four zones which we are promoting will serve as an example for prospective investors," said a commerce ministry official.

The official added that though some investments were starting to trickle in, they were not enough to serve the objectives of the policy.

"Over and above that, a lot of agri zones were announced by state governments without giving a thought to the fact that private players needed to be involved in their development."