Tamil Nadu’s New food processing policy recommends incentives

Dec 13, 2018

Chief Minister Edappadi K. Palaniswami unveiled The Tamil Nadu Food Processing Policy–2018 at a function at the Secretariat in the presence of Agriculture Minister R Doraikannu and senior officials. This policy seeks to provide incentives to investors beside what is being offered by the State Industrial Policy of 2014.

“The policy is expected to create a lot of scope for private entrepreneurs to invest in food processing sector and pave way in augmenting quality production in agriculture, horticulture, animal husbandry, dairy and fisheries sector since remunerative price to farming community is made possible besides huge employment opportunities in this sector. Also a scheme of interest subvention and reimbursement of State Goods & Services Tax (SGST) are the “attractive features” of the policy document”, said a senior official of the Agriculture Department.

There will be a government support where it will provide 3% interest subvention per annum on term loans taken by investors for fixed capital investment and 5% for women or SC/ST/OBC entrepreneurs.

The proposed SGST reimbursement will be given to new industrial units having investment of over Rs. 10 crore for 3 years from the date of commencement of business, provided the units must handle processing of fruits and vegetables, minor millets, poultry, fish and medicinal plants,. The land cost would not be included in investment.

The policy foresees provision of stamp duty exemption for notified food parks and industrial parks. Market or Mandi fee will be waived off for fruits and vegetables bought directly from Farmers/Producers Organizations (FPOs) and brought to the food parks for processing.

The Policy also includes research institutes for food processing industry,  training of new entrepreneurs, transport, quality certification, financial support for exporting commodities. These approaches are expected to decrease the post-harvest losses due to better technologies and improved value chain, besides ensuring food availability and nutritional requirement and  improve farm gate price to farmers thereby enabling increase in farm income.  The policy initiatives will ensure improving the export potential for processed food from the State.

To implement the policy, the Agricultural Marketing & Agri Business department will be act as a nodal agency and it will coordinate with other departments, Central government and other agencies.

The announcement of the policy was made by Finance Minister O. Panneerselvam during the budget speech for 2018-19. The policy aims at incrementing farmers’ income, minimizing wastage of agricultural produce, setting up food parks.

The Chief Minister also inaugurated a cold storage unit with a capacity of 50 tonnes at Hosur. It is set up by Agricultural Marketing and Agri-Business Department at a cost of Rs.10 Crore.

Tamil Nadu state generates 120 lakh tons of foodgrains, 140 lakh tons of vegetables & fruits, 77.42 lakh tons of milk, 4.41 lakh tons of broilers, 1,741 crore eggs and 7.12 lakh tons of fish annually. It has nearly 24,000 food processing firms registered small and micro enterprises and 1,100 firms as medium and large units. Tamil Nadu accounts for around7% of India’s food processing output.

Food Processing Park in Tamil Nadu has been proposed in Villupuram, Tirunelevi, Theni, Dindigul, Krishnagiri, Virudhanagar, Tiruvannamalai, Salem, Erode & Cuddore districts dealing with fruits & vegetables, fisheries, poultry, dairy and meat.

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