AEZ policy for floriculture yet to take shape

Special Correspondent

The Government's nodal agency has been defunct for over a year

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Official says
Government did not act as catalyst
It should have got funds for development work in AEZs
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Bangalore: Even while the Ministry of Commerce is planning to revamp the
Agri Export Zones (AEZ), the State Government's AEZ policy has gone to
seed, particularly with regard to floriculture.

The State Government's nodal agency has been defunct for over a year and
the AEZ policy for floriculture remains on paper. The Centre has taken
note of this and is reportedly going through the report of the peer
group evaluation of AEZs.

Nodal agency

After the Karnataka Agro Industries Corporation that was the State nodal
agency for floriculture went bust, there has been no direction to the
AEZ. Subsequently, there was a move to empower the International Flower
Auction Centre of Bangalore (IFAB) to address the needs of floriculture
exporters, but it did not take off.

According to Agriculture Secretary A. Ramaswamy and Horticulture
Secretary D.V. Rao, the IFAB is the nodal agency.

An official in the IFAB confirms that after the KAIC wound up, IFAB was
the nodal agency but is not too sure whether it continues to be. The
IFAB has not convened a meeting for quite some months now and the reason
given is that its is awaiting the decision of the Commerce Ministry on
overhauling the AEZs. IFAB sources say that no meeting has been held
under the AEZ for quite a few months and that it has not got any funds
to take up infrastructure development projects.

The AEZ for floriculture in Karnataka (Bangalore Rural being the hub of
floriculture units) thus continues to languish.

Closure

When the policy was announced in 2002, about 35 floriculture units
sprang up, of which only 15 bloomed and the reasons for closure of the
remaining have been many.

Attributing the failure to the State, the Regional In-charge of
Agricultural and Processed Food Products Export Development Authority R.
Ravindra said the State Government did not act as a catalyst as
envisaged in the AEZ policy.

"Although the Centre mooted the policy, it was envisaged that the State
would act as a facilitator, but it has not been so. There has not been
any new flow of private investments in the floriculture sector, while
only 40 per cent of the potential has been tapped."

Newer markets such as Japan and the Middle East are emerging and the
demand for both dry and cut flowers is growing exponentially.

Irregular power supply

Irregular supply of power and power tariff charged at industrial rates
and not agricultural rates have affected floriculture production.

Mr. Ravindra says that unlike the Special Economic Zones that take a
cluster approach, the AEZs do not have clear-cut boundaries although the
units can be in a particular region.

The AEZ policy was supposed to "focus and converge" all the State and
Central schemes in that particular area so that private investors
flocked there. But that has not happened.

"The State nodal agency should have got the funds and released it for
development work in the AEZs," he says. The AEZ for floriculture
entailed an investment of around Rs.29.28 crore, out of which Rs. 11.71
crore was from Central Government agencies, Rs. 7.37 crore from State
Government agencies and the remaining Rs.10.2 crore from the private
sector.

http://www.hindu.com/2007/03/09/stories/2007030915920500.htm