Want Argi Export Zones or Special Economic Zones ?

[Guest guest]

WANT AGRI EXPORT ZONES (AEZs) OR SPECIAL ECONOMIC ZONES (SEZs) ? Government's efforts are now concentrated on promotion of Special Economic Zones (SEZs) by grabing prime farmlands and giving it at a platter to MNCs and big corporations. It has extended fiscal sops which would cause a revenue loss to the government to the tune of Rs 10,00,000 million (conservative estimate of the government). Comparatively, the 60 Agri Export Zones do not enjoy any special fiscal sops. Government has not fulfilled its investment commitments to AEZs, while the AEZs have the potential not only to boost exports, but also cause an integrated rural development. HEre is a report ------ 1. Agri Export Zones put up a good show, seek investment Also 2. Freight costs, loans take toll on floriculture units .

Agri Export Zones put up a good show, seek investment http://www.financialexpress.com/fe_full_story.php?content_id=149174 ASHOK B SHARMA Posted online: Monday, December 18, 2006 at 0106 hours IST NEW DELHI, DEC 17: Agri Export Zones (AEZs), despite putting up a good performance, failed to top decision makers’ priority list. The scheme for setting up AEZs was conceived in 2001 and today they are 60 in numers, spread across 20 states. Despite low investments and inadequate infrastructure, AEZs have received an exports earning of over Rs 60,000 million in the last five years. And in the last six years, not much investment has flowed in. This is despite promises made to agriculturists and traders. Both central and state governments have not been playing a

proactive role to bring in investment, let alone encouraging private sector to invest. As per initial criteria, investments by the Centre, states and the private sector has to be in the ratio of 1:1:2. Accordingly, the total investment for 60 approved agri export zones (AEZs) was estimated at Rs 17,179.50 million. Against this, the total flow of investment to date is only 8,111.80 million. Despite low investments, AEZs could achieve about 50% of the export target (Rs 118, 214.70 million) over a period of five years. “There is a lot of under-reporting by the state governments about the movement of produces from AEZs for exports. We have received a exports figure from AEZs of only Rs 51,852.30 million in five years. This should exceed Rs 60,000 million,” said a senior commerce ministry official. Against the deliberate negligence of AEZs, the government pampered the controversial

special economic zone (SEZ) scheme by extending all possible sops. Another reason for exports performance being below target is that all AEZs were not set up in 2001. Many of them were set up much later. And majority of the exporters are of the similar view. They believe that majority of the investments done so far are by the private sector. The investment could have been much higher had the central and state governments developed better infrastructure, encouraged investment and put in their share of the investment. Executive director of the International Trade in Agriculture and Agro-based Industries (CITA), Vijay Sardana said: “The investments could have been much higher had there been a transparent system for fixing accountability. In AEZs multiple agencies belonging both the Central and state governments are involved. Unlike SEZs, there is no single promoter for an AEZ. The Agriculture and Processed Food

Export Development Authority (APEDA) is designated as the nodal agency without much effective authority for implementation.” According to commerce ministry sources, the APEDA had recently asked for Rs 2,500 million to support AEZs under the government’s scheme for assistance to states for infrastructural development for exports (ASIDE). But the ministry agreed to render only Rs 500 million to AEZs under ASIDE scheme. Unlike the SEZs, the AEZs do not have specified physical boundary. They are confined to specific regions in states, known for growing specific crops. The AEZs are designed for bringing integrated development of larger area including boosting income prospects. So far, the AEZs have been set up for crops like pineapples, litchi, potatoes, mangoes, vegetables, Darjeeling tea, gherkins, rose onions, flowers, vanilla, Basmati rice, medicinal and aromatic

plants, grapes and grapevines, kesar mangoes, onions, pomegranate, banana, oranges, mango pulp, chilli, apples, walnut, garlic, seed spices, wheat, lentils and gram, cut flowers, cashewnuts, honey, sesame seeds, cherry pepper, ginger, coriander and cumin. Farmer leader and executive chairman of Bharat Krishak Samaj, Krishan Bir Chaudhary said, “Unlike SEZs, the AEZs do not enjoy any special fiscal sops and hence there is no revenue loss for the government. The government has already admitted that the revenue loss due to SEZs would be over Rs 10,00,000 million by 2009-10. SEZs are being set up on prime farmlands at the expense of food security. Out of the acquired land for SEZs, only 35% is for real business and the rest is for real estate. AEZs are much better for farmers.” According to Chaudhary, AEZs do not displace farmers, rather are aimed at strengthening their

income and livelihood. He alleged, “If the government is interested in integrated rural development, it should support AEZs and scrap the SEZ scheme. If SEZs are to set up it should be done on 552,692.26 sq km of identified wastelands in the country.”-- Freight costs, loans take toll on floriculture units http://www.financialexpress.com/fe_full_story.php?content_id=149159 ASHOK B SHARMA Posted online: Monday, December 18, 2006 at 0018 hours IST NEW DELHI, DEC 17: Indian floriculture units are in bad shape these days. Exporters are suffering from high freight costs and problems of settlement of loans with the bankers. About 50% to 63% of air freight cost disadvantage vis-a-vis their counterparts from

east Africa are faced by flower exporters. The exporters from east Africa make use of dedicated aircraft or chartered flights and adopt economies of scale to route to European destination markets, which are geographically closer to them. A government scheme for rendering transport assistance to Indian exporters is, however, in place. But the quantum of subsidy is limited to the least of 23% of the airfreight or 20% of the FoB or a specific rate in rupees per kg. This partly compensates the cost disadvantage to the exporters. The Agriculture and Processed Food Export Development Authority (APEDA), which is the nodal agency for promoting floriculture for exports, has appealed to the government to increase the quantum of subsidy on freight and put in place long-term assistance scheme, as the present scheme is likely to expire by March 31, 2007.

The Succour • Indian fresh cut flower exporters face about 50% to 63% of air freight cost disadvantage• A government scheme for rendering transport assistance to Indian exporters is in place Another disadvantage for Indian floriculture units is that they import quality-planting materials from against a duty of 8%, while their counterparts in east Africa import against zero duty. After the TECS conducted a study on rehabilitation of ailing floriculture units in the country and suggested a rehabilitation package, Apeda entrusted AF Ferguson & Co to evaluate the rehabilitation package and identify the sick units for revival. Before the Ferguson study already 16 sick units have settled their accounts with their bankers and five such units had reached a settlement with their bankers during the course of the study. This situation has given APEDA

to plead with the government for the revival of other sick floriculture units and demand more sops. Most of these units which recently settled their accounts with bankers on their own are in the regions around Pune and Bangalore. APEDA has pleaded for the release of transport assistance to the units which have revived on their own. The transport assistance for these units were held in abeyance as they were declared sick. APEDA has also pleaded for setting up

of a Special Floriculture Rehabilitation Fund to render one time assistance to the remaining sick units for revival. It has suggested waiving of outstanding dues payable to the National Horticulture Board. It pleaded for extension of special subsidy to growers for encouraging replacement of old plant materials by quality planting materials and an effective scheme for quality certification for boosting exports. Global floriculture market is worth $ 11 billion and is growing at the rate of 15% per year. Comparatively India’s share global floriculture trade is negligible at 0.65%. Yet Indian floriculture exports are growing at the rate of 13.75 per year. ---------------------------- Send free SMS to your Friends on Mobile from your Messenger. Download Now! http://messenger./download.php