SEZ protests may turn the heat on AEZs

PRABHA JAGANNATHAN

TIMES NEWS NETWORK[ MONDAY, FEBRUARY 05, 2007 03:21:33 AM]

NEW DELHI: The development of agri export zones (AEZ) — posited a decade
ago as an out-of-the-box idea by the Centre for faster development of
agricultural exports in resource-rich, but infrastructurally backward
regions — may turn out to be a casualty of the SEZ row.

There may be no special incentives in Budget 2007 for AEZs, which appear
to have become as touchy an issue as SEZs, but for an entirely different
reason: failure. Acknowledging that anti-SEZ developments may have an
unexpected fallout, government sources said, “AEZs are also likely to be
a hands-off area in the Budget.”

Despite the grandiose announcement in Budget 2001 for the development of
AEZs (this was followed in 2002 by RBI announcing a refinance scheme for
farmers pursuing contract farming in AEZs), AEZs have been in the
doldrums subsequently. Even the food processing ministry’s own review of
the performance of sanctioned projects in 25 AEZs found very few were
doing well, and those that were progressing at all did so only
marginally. In short, they neither attracted investment nor aided in
boosting export of agricultural produce and processed food products, as
envisaged by the government.

The government has sanctioned 60 such projects since 2001-02, which
would have involved an investment of Rs 1,800 crore. The projects were
to result in exports of over Rs 11,000 crore. However, the parent
ministry’s own reality check showed that AEZs underperformed to the
extent of a whopping 50%.

http://economictimes.indiatimes.com/News/Economy/Infrastructure/SEZ_protests_may_turn_the_heat_on_AEZs/articleshow/1560719.cms