Agri Export Zones

Presented by
Rishika Mittal (09020242030)
Sachin Lakade (09020242032)
Sadanand Kadam (09020242033)
Saurabh Walke (09020242034)
Yogesh Sharma (09020242035)
Susrita Sen (09020242036)
Raj Saxena (09020242037)

MBA- AB
2009 – 2011
Symbiosis Institute of International Business
The Concept of Agri Export Zone
• Under chapter 16 of Exim Policy 2001, a new concept of
Agri Export Zone (AEZ) has been inserted by Govt. of
India on 11.05.2002 and its valid till 11.05.2012.

• An Agri Export Zone or AEZ is a specific geographic

region in a country demarcated for setting up agri based
processing industries, mainly for export.

• The term is widely used mainly in India.

• APEDA has been nominated as the Nodal Agency to

coordinate the efforts on the part of Central Govt.
negotiations.
The Concept of Agri Export Zone
• The concept of agri export zone thus attempts to take a
comprehensive look at a particular produce/product
located in a contiguous area for the purpose of
developing and sourcing the raw materials, their
processing/packaging, leading to final exports.
Need for AEZ
• Lack of adequate storage facilities.
• Lack of suitable processing.
• Lack of promotion of products.
• Lack of marketing,
• To overcome all this barriers with the help
of APEDA ,AEZ was launched..
Objective
In a fast changing international trade
environment and with a view to providing
remunerative returns to the farming community in
a sustained manner, efforts will be made to
provide improved access to the produce/
products of the Agriculture and Allied sectors in
the international market.
Measures envisaged to promote
exports from AEZ

i. Financial Assistance

ii. Fiscal Incentives

 Financial Assistance
• Both Central as well as State Government and their agencies are
providing a variety of financial assistance to various agri export
related activities.

• These extend from providing financial assistance for Training and

Extension, R&D, Quality Upgradation, Infrastructure and Marketing
etc.

• All these facilities would have to be dovetailed and extended to

promote agri exports from the proposed Zones in a coordinated
manner.

• Some additional features like providing grants from Market Access

Initiative fund could also be considered.
Fiscal Incentives
• The benefits under Export Promotion Capital Goods Scheme, which were
available only to direct exporters, have now been extended to service exporters
in the AEZ.

• Service provided to ultimate exporters will be eligible for import of capital goods
at a concessional duty for setting up of common facilities.

• They shall fulfil their export obligation through receipt of foreign exchange from
ultimate exporters who shall make the payments from their EEFC account.

• Exporters of value added agri products will be eligible for sourcing duty free fuel
for generation of power, provided the cost component of power in the ultimate
product is 10% or more and the input-output norms are fixed by the advance
licencing committee of the DGFT.

• Similarly, input-output norms can also be fixed for sourcing other inputs, like
fertilizer, pesticides etc. duty free for cultivation purpose.
India’s export contribution
Anticipated benefits
i. Strengthening of backward linkages with a market oriented approach.

ii. Product acceptability and its competitiveness abroad as well as in the domestic market.

iii. Value addition to basic agricultural produce.

iv. Bring down cost of production through economy of scale.

v. Better price for agricultural produce.

vi. Improvement in product quality and packaging.

vii. Promote trade related research and development.

viii. Increase employment opportunities.

Operation of the Concept
• The entire approach of promoting the Agri Export Zone
would have to be taken on a project mode.

• The State Governments would need to identify potential

export products which could be selected for development
with a cluster approach.

• The States will forward such project proposals to APEDA

which will conduct the initial scrutiny of the proposals.

• If found feasible ,APEDA may provide necessary

guidance in preparing the detailed project report.
Operation of the Concept
• This report, after preliminary scrutiny, will be placed
before the Steering Committee which has been
constituted under the chairmanship of Commerce
Secretary with the following members:

– Director General of Foreign Trade, Member

– Joint Secretary (EP Agri Division, DOC) Member
– Joint Secretary (Deptt. of F.P.I.,MOA) Member
– Joint Secretary [Infrastructure Division, DOC] Member
– Executive Director , NHB Member
– Representative of DG, ICAR Member
– Director (Finance, Deptt. of Commerce) Member
– Chairman, APEDA Convenor
Operation of the Concept
• Once the project proposal of a State has been
approved by the Committee, an MOU would be
signed between APEDA (on behalf of the
Central Government) and the State Government
for providing possible assistance at each stage
of the project.

• The responsibilities of the State government

would also be defined in the MOU, a draft of
which is under preparation.
Guidelines for State Governments
• Identification of a agricultural produce (cash crop) which would be developed for
export through a cluster approach.

• This would, obviously, be based on concentration of production of a given

product or a set of products in a particular area which could be promoted as an
Agri Export Zone.

• The Zone could be a block/group of blocks or a district/group of districts.

• An Agricultural University would need to be identified which will assist in the R&D
work relating to development of the project. Such University should preferably be
in the vicinity of the Zone.

• In case of horticulture based projects, an exporter should be identified who would

source produce from 100-200 orchards in a contiguous area. In case there are
more exporters/ farmers interested in exports, then a single pack house operator
or a processing unit to serve the exporters/farmers may be identified.
Guidelines for State Governments
• Efforts should be made to ensure enough production crops
to enable the unit to run round the year.

• The proposal should indicate the entire range of activities

involved in the process, list out interventions being provided
by the State Governments at different levels and also
suggest the facilitations that can be provided by the Central
Government. Interventions from the Centre could be, inter-
alia in areas of feasibility studies, setting up backward
linkages, training and extension, pre and post harvest
activity, packaging, transportation, market promotion, etc.
Responsibilities of the State Government
i. Identification of a State Government institutions/agency which
will be responsible for implementation and coordination of the
entire activity.

ii. Single window problem solving desks should be created in the

offices promoting zonal approach to agriculture exports.

iii. Adequate availability of infrastructure, inputs, electricity, etc.

iv. Redeployment of extension officers in the Export Zones who

would interact regularly with APEDA and organise
training/activity on a regular basis with a definite action
programme.
EPCG Scheme
• Agriculture exporters shall be eligible for the facility of EPCG scheme as
described in Chapter-6 of the Policy.

• The licence holder shall not be required to maintain the average level of
exports

• Exporter shall have the facility to move or to shift the capital goods within
the zone, provided he maintains accurate record of such movements.

• Such equipments shall not be sold or leased by the licence holder.

• This facility shall also be available to service providers, setting up

common infrastructural facilities such as sorting, grading, polishing,
packaging, cold storage, transport equipment/ refrigerated vans, vapour
treatment heat treatment plant, X-ray screening facility etc.
Status
The agri exporter shall be eligible for
recognition as Export House/Trading
House/Star Trading House/ Super Star
Trading House on achieving the
performance level as mentioned next slide
 Status
Category Average FOB value FOB value during the Average NFE earnings NFE earned during the
during the preceding made during the preceding
preceding three licensing year, in preceding three licensing year, in
licensing years, Rupees licensing years, in Rupees
in Rupees Rupees

(1) (2) (3) (4) (5)

EXPORT HOUSE 4 crores 6 crores 3 crores 5 crores

TRADING HOUSE 20 crores 30 crores 15 crores 25 crores

STAR TRADING 100 crores 150 crores 75 crores 125 crores

HOUSE

SUPER STAR TRADING 300 crores 450 crores 225 crores 375 crores
HOUSE
Information Requirements
A database on agricultural products and
markets including aspects of commercial
intelligence relevant to exports will be
established. Assistance shall be provided
to the exporters, growers’ organisations,
trade association for conducting surveys/
feasibility studies, market studies etc
Schemes OF APEDA
• Schemes for Market Development
Components Scale of Assistance
1. Activity for development of packaging Maximum amount in case of
standards and design. sharing with exporters / organization is
Rs.5 lakhs

2. Assistance to exporters for use of 30% subject to ceiling of Rs.1.50 lakhs

packaging material as per standards per
and specifications developed or adopted beneficiary.
by
APEDA.
3. Development and dissemination of 100% to be implemented by APEDA
market information data base on
products, infrastructure, markets and
pre-feasibility surveys / study etc.
Schemes for Market Development
Components Scale of Assistance
Assistance to exporters, growers 50% of the total cost subject to ceiling of
organizations, trade associations for Rs.2.00 lakhs per beneficiary.
conducting surveys, feasibility studies
etc.

Supply of material samples, product 100% of the cost

literature, development of web site
advertisement etc, for publicity and
market promotion for fairs / events
organised / sponsored by APEDA.
Schemes For Development of Infrastructure
Components Scale of Assistance
Establishment of common infrastructure 100% grant-in-aid
facilities by APEDA or any other
Government or Public Sector agency
like Airport Authority of India or Port
Trust etc.

Assistance for purchase of specialised 25% of the cost subject to a ceiling of

transport units for animal products
horticulture and floriculture sector.
Mechanisation of harvest operation of
the
produce.
Setting up of sheds for intermediate
storage, grading, cleaning & ripening
operation of produce.
Rs.2.50 lakhs per beneficiary.
25% of the cost subject to a ceiling of
Rs.5.00 lakhs per beneficiary
25% of the cost of equipment subject to
a
ceiling of Rs.5.00 lakhs per beneficiary
Schemes For Development of Infrastructure
Components
Setting up of pre cooling facilities etc.
with proper air handling system/ cold
storage for storing the produce
Scale of Assistance
25% of the cost of equipment subject to
a
ceiling of Rs.10.00 lakhs per beneficiary

Providing facilities for pre-shipment 25% of the cost of equipment subject to

treatment such as fumigation, X-ray a
screening, hot water dip treatment, ceiling of Rs.10.00 lakhs per beneficiary
Water
softening Plant

Assistance for setting up of environment 25% of the cost subject to a ceiling of

control system e.g. pollution control, Rs.25 lakhs per beneficiary
effluent treatment etc.
 Schemes for Quality Development
Components Scale of Assistance
Assistance to exporters, producers, 50% of the total cost subject to a ceiling of
trade associations, public institutions etc. Rs.5 lakhs per beneficiary.
for setting up / strengthening laboratories.

Upgradation and recognition of labs for
export testing.
For upgradation upto 50% of cost for
private labs and upto 100% of the cost for
Central /State Government / University
laboratories subject to a maximum of
Rs.50 lakhs.

Assistance to exporters & producers for 50% of the cost subject to a ceiling of Rs.2
installing quality management, quality lakhs per beneficiary for each system
assurance and quality control system such
as ISO series, HACCP, TQM etc. including
consultancy, quality improvement and
certification for these.
Schemes for Quality Development
Components Scale of Assistance
Testing of water, soil residues of 50% of the cost of tests subject to a
pesticide, veterinary drugs, hormones, ceiling of
toxins Rs.2000 per sample. Payment shall be
contaminants in agricultural produce / made
products. direct to laboratories and not to
individual
exporter.
Schemes for Research and Development
Components Scale of Assistance
Assistance to support Research and 100% APEDA’s internal scheme .
development for export efforts through R
& D organizations in Government
sector .

Assistance to exports, Trade Upto 50 % of the total cost of the project

Associations , Cooperative institutions subject to a ceiling of Rs. 10 Lakhs.
etc. to support
relevant research & development for
export enhancement through R & D
organizations in cooperative/ private
sector .
Statement Of Actual Investment And
Exports From Sanctioned AEZ March 2008
State AEZ Project Actual Exports (Rs. Actual Investments(Rs.
Cr.) Cr.)
West Bengal Pineapple, Lychee, Potatos, 85.65 83.47
Mango, Vegetables,
Darjeeling Tea

Karnataka Gherkins, Rose Onion, Flowers, 1544.79 91.04

Vanilla,

Punjab Vegetables, Potatoes, Basmati 1523.83 49.48

rice,
Uttar Pradesh Potatoes, Mangoes and 19.96 39.32
Vegetables, Basmati Rice

Maharashtra Grape and grapewine, Mango 1166.34 365.32

(Alphonso), Kesar Mango,
Flowers, Onions,
Pomegranate, Banana,
Oranges

Andhra Pradesh Mango Pulp & 2852.59 206.88

Fresh Veg., Mango & Grapes,
Gherkins, Chilli

Jammu & Kashmir Apple, Walnuts, 676.93 20.85

Statement Of Actual Investment And
Exports From Sanctioned AEZ March 2008
State AEZ Project Actual Exports (Rs. Actual Investments (Rs.
Cr.) Cr.)
Tamil Nadu Flower, Mangoes, 102.29 28.78
Cashewnut
Bihar Lychee, Vegetables & 5.87 20.10
Honey
Gujarat Mango and Vegetables, 302.14 30.31
Value added Onion,
Sesame Seed
Kerala Horticulture Products, 2277.79 3.10
Medicinal Plant

Assam Fresh & Processed Ginger 2.17 3.15

Madhya Pradesh Potatoes 75.42 60.80

Onion
Garlic, Seed Spices, Wheat, Lentil
and Grams, Oranges

Rajasthan Coriander, Cumin 49.94 71.86

Current Status of AEZ
• At present, APEDA has set up 60 Agri-Export Zones
(AEZs) spread over 230 districts in 20 states.

• The total investment committed under the AEZ

programme by all agencies stands at Rs.1, 724
crore, including private investments of Rs.970 crore.

• In all, 35 crops were identified for promotion in these

zones.
Agri Export Zones in Maharashtra

 Mango (Alphonso): Ratnagiri, Singhudurg

 Mango (Kesar) : Aurangabad, Jalna, Beed, Latur
Ahmednagar and Nashi
 Grapes : Nashik, Pune, Ahmednagar,
Sangli, Latur, Osmanabad
 Onion : Nasik, Pune, Satara, Ahmadnagar,

 Orange : Amravati and Nagpur

 Pomegranate : Nasik, Solapur, Pune,
 Banana : Jalgaon, Dhule, Hingoli, Buldhana &
Wardha Nanded,Parbhani,
 MAHAMANGO
• State has announced the creation of an AEZ (Agri Export Zone) for
Alphonso Mangoes in the Districts of Sindhudurg, Ratnagiri, Raigadh and
Thane.
• The MSAMB has been named as nodal agency.
• A Detailed Project Report (DPR) submitted by the MSAMB has been
approved.
• GoM signed a MoU with the GoI to implement the AEZ project (on 12
February 2002).
 Pre-cooling, cold storage and pack house facility of Mahamango at Kudal
has been upgraded for export to China.

Maharashtra State Agricultural Marketing Board in coordination with State

agricultural department, Local APMC and cooperative societies
continousely arraning training and demonstration programs in rural area to
increase export quality production.
• During the year 2003-04, 1656 farmers were trained in 35 one-day
training programs.
• During the year 2004-05, 617 farmers were trained in 11 one day
training programs.
• during the year 2005-06, 1469 farmers were trained in 22 one day
training programs.
In the current year 2006-07 from august 2006 onwards 115 farmers
were trained .
Investment- MSAMB with the help of APEDA, New Delhi and
Devgad mango growers co-operative society has developed Mango
export facility center at Jamsande at Nachane, dist- Ratnagiri.
These both facilities have following different units-
Precooling= 5 Mts.
Cold storage= 25 Mts.
Ripening Chamber= 5 Mts.
mechanical Handling System= 1.5 Mts/hr.
NABARD Initiatives in Promotion of AEZs
Financial Initiatives:-
• NABARD has extended 100% refinance
scheme to all client institutions. (CBs, RRBs,
SCBs, SCARDBs with NPA not exceeding 5%)
• Minimum repayment period of 3 years for all
activities in AEZs
• Preparation of crop specific credit plans for
AEZs
• Sanctioned a scheme for cultivation and
processing of Gherkins in Karnataka under co-
financing scheme.
Promotional Initiatives
• Investors conferences for Agri-Exports in four regions along
with APEDA and EXIM Bank to explore the possibilities of
higher investment in agri exports by Corporate Sector.

• Inter Institutional meetings of NABARD, APEDA and EXIM

Bank were held during 2002-03, 2003-04 and 2004-05 to
review the progress of implementation in AEZs and to consider
further policy changes.

• NABARD Regional Offices have been conducting State Level

Review meetings on AEZs involving all stakeholders to address
the challenges iimplementation of AEZs.
Refinance support by NABARD
• Disbursement of refinance to the tune of Rs.111094 lakh
under AEZ for various crops during theperiod 2002-03 to
2005- 06
• Disbursement under AEZ since the inception of the
programme is furnished below

Year Total (Amt Rs Lakh)

2002-2003 4539
2003-2004 34316
2004-2005 43714
2005-2006 28525
Total from 2002 to 2006 111094
The Road Ahead
• Inadequacy of infrastructure facilities in most of
the AEZs is another area,which needs
immediate attention.

• NABARD can support infrastructure

development projects in AEZ areas through
Rural Infrastructure Development Fund.

• Promotional initiatives in the marketing of Indian

crops and patenting product based on
geographical indications.
 Y O U…
A N K
TH