Agro-industrial parks - fao.org

1 agricultural AND FOOD ENGINEERING WORKING DOCUMENT 3 Agro-industrial parks Experience from India agricultural AND FOOD ENGINEERING WORKING DOCUMENT 3 Agro-industrial parks Experience from India by K. Laxminarayana Rao FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2006 The agricultural and Food Engineering Working Document disseminates findings of work in progress to encourage the exchange of ideas and experiences related to agricultural and food engineering within agri-food systems. The series aims to bring the findings to the public domain as quickly as possible, even if the presentations are less than fully polished. The papers carry the name of authors and should be used and cited accordingly. The findings, interpretations and conclusions are the author s own.

2 The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. All rights reserved. Reproduction and dissemination of material in this information product for educational or other non-commercial purposes are authorized without any prior written permission from the copyright holders provided the source is fully acknowledged. Reproduction of material in this information product for resale or other commercial purposes is prohibited without written permission of the copyright holders. Applications for such permission should be addressed to: Chief, Publishing Management Service Information Division FAO Viale delle Terme di Caracalla, 00100 Rome, Italy or by e-mail to: FAO 2006 iiiContents Acknowledgements ix Foreword xi Preface xii List of abbreviations xv 1.

3 Background 1 Food security for expanding populations 1 Adding value and creating wealth 2 Agro-industries in India 3 Farmer s market on the outskirts of Bangalore. Yelahanka then and now 3 Agro-industrial parks 5 Technical information - Karnataka State initiative 7 Food India 7 Becoming involved 8 2. Raw material resources 9 Importance of raw material resources 9 agricultural production India 10 production trends and growth rates 11 Trends in productivity of major food crops 12 production of agricultural crops in India 12 Post-harvest technologies 16 Institutional support and inputs influencing agricultural production 17 agricultural production in Karnataka

4 19 Horticultural crops in Karnataka 20 production and consumption balance 21 3. Agro-processing industries in developing countries 23 Agro-food processing industries in India 23 Food processing industry profile 24 Status small-scale food processing industries and prospects for processed foods 26 Technology profile of agro-food industries in developing countries 28 Constraints with developing agro-food industries 31 Need for creating new processing capacity 31 Locating food processing industries

5 33 4. Markets 35 Markets for industrial plots or units 35 Markets for Agro-industrial products 36 Agro-industrial base 36 Food processing industries in Karnataka 41 Domestic markets for processed foods 42 Export markets for agricultural products and processed food products 44 Market driven Agro-industrial projects

6 45 Requirements for primary processing units 46 Requirements for secondary and tertiary processing units 46 Commercial infrastructure facilities 47 5. Challenges for agro-industries 49 Constraints affecting the growth of agro-food industries 49 Reasons for poor export performance 50 Need for quality control facilities 51 Detention of food shipments at ports of entry 51 Need for quality control of raw materials 53 iv Food quality control 57 Common facilities for quality control

7 57 Need for warehouses and cold storage 58 Need to propagate crop varieties required for processing 58 6. Government support policies 61 Need for policy support 61 Policies affecting the development of food processing industries 62 Land policies 62 agricultural policies 63 Licensing, monitoring and controls 63 Financial policies 64 Import-export policies 64 Science and technology policies 65 Impact of industrial policies on the development of food processing industries in India 65 Development schemes of the Ministry of Food Processing Industries in India 67 7.

8 Framework for model Agro-industrial park 71 Criteria for locating an Agro-industrial park 71 Primary considerations 71 Agro-industrial development potential of an area 71 Agro-industrial park for Malur in Kolar District: case study of agro- industrial development potential 72 Size of the Agro-industrial park 75 Building bylaws 76 Guidelines for fruits products order 76 Plot mix 77 Common infrastructure facilities 78 Commercial infrastructure facilities producer support 78 Shared infrastructure facilities industrial support 82 Additional common facilities

9 86 Park zoning 90 Management of the park and common facilities 90 Park management 90 Management of common facilities 92 Economics of model Agro-industrial park 93 Project costs 93 Financing project costs 95 Marketing facilities 96 Selling prices for plots and ready-built sheds 97 Impact of an Agro-industrial park on the region 99 More food available 99 Creating employment 100 Improved food production for domestic consumption and exports 100 Byproducts utilization

10 100 Economic development 101 8. Summary and conclusions 103 Introduction 103 Raw material resources 104 Agro-industrial choices 105 Markets 106 Problems faced by agro-industries 107 Government support policies 108 Model Agro-industrial park: framework 109 vAnnexes 1.