Mega food parks in India

By Hemant Kumar|Updated : February 3rd, 2020

A Mega food park is a cluster-based approach. It is a hub and spoke model which comprises of Collection Centres, Primary Processing Centres, and a Central Processing Centre. Primary Processing Centres and Collection centres are spokes and Central processing centre is the hub. Collection Centres is a point where produce from farmers, farmer’s group, and self-help group aggregates. They feed the raw material to the Primary Processing Unit. Primary Processing Centres have been handling Centres where they do primary processing. Central Processing Centres is an Industrial park with approximately 50 acres of area. Here the central processing of raw material provided by the primary processing Centres happens. All the forward and backward linkages are available at the Central processing Centers. These are demand-driven projects and facilitate food processing units to meet environmental, safety, and social. MoFPI does not establish MFPs on its own but assists Special Purpose Vehicle (SPV) registered under the Companies Act and State Government/State Government entities/Cooperatives to establish. The government provides financial assistance as grant-in-aid at 50% of the eligible project cost in general areas and 75% in NE Region and difficult areas subject to a maximum of Rs. 50 crore per project. Difficult area means Hilly States and Integrated Tribal Development Project (ITDP) areas.

Mega food parks in India: Objectives; Role of State Govt; Challenges; Way Forward

Objectives of the scheme

  • In India, agriculture is the main occupation of more than half of the population. However, the contribution of agriculture in the total GDP of the country is very less.
  • To give a push to the agriculture sector, Government came up with a Mega Food Park scheme in 2008.
  • The objective of the Mega Food Park scheme is to provide a mechanism to link agriculture production to the market.
  • Mega food Park scheme will bring the farmers, processors, and retailers together to ensure maximizing value addition, minimizing wastage.
  • It helps in reducing the wastage of the perishables food items and increase the processing of food items.
  • Mega Food park helps in increasing the income of the farmers and creates job opportunities in rural areas.

Role of the state government

  • The State government will assist Special Purpose Vehicles in the procurement of land.
  • The State Government will provide all the clearance whenever required for setting up the Mega Food Park and its component.
  • The State government will provide a flexible and conducive labour environment and consider other facilities like exemption of stamp duty, VAT/Sales Tax exemption.
  • The State Government will provide a single clearance window for the scheme.


  • Land acquisition is a significant problem as it is challenging to get 50 acres of land, particularly in small and hilly states.
  • Mega food parks cannot own land, so they cannot use the land as collateral to take loans.
  • Delay in clearance from the State Government or related agencies
  • The scheme uses One size fit all approach, which has not been able to attract investors with different investment requirements
  • Skill level of workers is weak, and skilled labour is not cheap
  • The scheme has not attracted global companies as some companies want to work on Joint ventures instead of a grant approach in the scheme.
  • The timeline to implement the scheme is 30 months, is not flexible, and does not take into account the contingencies.
  • Integration of Agri-business in India is difficult because most of Agri-business happens through cooperative
  • Low awareness among people regarding the scheme

Way forward

  • For solving the Land acquisition problem, a Landbank scheme or land pooling scheme is an alternative.
  • Spread awareness through social media among all the stakeholders.
  • Lose the timelimit for the implementation of the scheme.
  • Integrate the agri-business with the Mega Food Park scheme by providing incentives to them.
  • The government has drafted the National Food Processing Policy, 2019, to boost the food processing industry. It will boost the MFP scheme through following enabling provisions
  • It suggests a review of the scheme parameters to ensure flexibility in terms of the requirement of different clusters and continue to extend financial assistance on a need basis.
  • The Policy envisages enhanced role of States in the development of food parks, where the state government would-
    • Allot land, on a priority basis, to such parks to promote Agri & food processing industry apart from support setting up of such parks in their respective states from their resources.
    • Extend incentives capital investment subsidy, stamp duty exemption, conversion charges to food parks and the units set up in such parks, under their respective policy.
    • Identify crop production and processing clusters using space technology and other IT tools and provide end to end value chain solutions and backward and forward.
  • Mega Projects, as defined by Centre and the states governments, would be supported in fast track mode and will receive priority in the allotment of land, sheds in industrial parks, electricity, water connection, environmental clearances.


Mega food park scheme is a step forward in doubling the farmer income by 2022.

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