Feasibility report Agroparks for the south of India
(APs4AP)
Version 14
DRAFT
Peter J.A.M. Smeets
Kalyan Chakravarthy
Raju Poosapati
Peter Christiaens
Jan Broeze
Steef Buijs
Koen Roest
Arjen E. Simons
Janneke Roos Klein Lankhorst
Madeleine van Mansfeld
2
Content
Foreword by 3 group presidents 3
Position and summary of the feasibility study 5
1 Background of the assignment 8
1.1 Indian Agribusiness Scenario: Socio Economic Impact 8 1.2 From supply driven to demand driven agriculture 22 1.3 Demand forecast 23
2 Development principles 27
2.1 Historical background of metropolitan agriculture 27 2.2 Agroparks as part of Intelligent Eco Networks 30 2.3 Sustainable development 31
3 Integrated approach for planning agroparks in India 34
3.1 Hardware aspects 35 3.2 Special focus: sustainable management of natural resources 38 3.3 Orgware aspects 41 3.4 Software aspects 48
4 Considerations for financial feasibility and risk assessment 52
4.1 Considerations for financial feasibility 52 4.2 Considerations on Risk Management 55
5 Site and context analysis 60
5.1 Introduction 60 5.2 Site information 61 5.3 Amravati 62 5.4 Kolar 65 5.5 Palmaner 67 5.6 Punganuru 69 5.7 Nayadupeta 71 5.8 Puduvoyal 74 5.9 IFFCO Nellore 77
3
Foreword by 3 group presidents
Agriculture in India is one of the most prominent sectors of the economy. Agriculture
and allied sectors such as forestry, logging and fishing accounted for 18.6% of the GDP
in 2005 and employed 60% of the country's population. About 43 % of India's
geographical area is used for agricultural activity and the sector accounts for 8.56 %
of India’s exports. Despite a steady decline of its share in the GDP, agriculture is still
the largest economic sector and plays a significant role in the overall socio-economic
development of the country.
The Indian economy has been registering impressive growth aided by the growth in
the manufacturing sector and impressive performance of the services sector
particularly. But the growth trajectory for the economy could have been far better if
the agricultural sector would have participated in this re-rating story. The primary
reason behind the alienation of the agriculture sector in India’s growth story has been
the stagnation or fall in public investment in agriculture since the mid-1990s and the
resultant decline of the share of the agricultural sector’s capital formation in the
Indian GDP. (The figure came down from 2.2 per cent in the late 1990s to 1.9 per cent
in 2005-06.)
The lack of investment into the sector has restricted the adoption of modern
agricultural practices and in the present context, the use of technology has been
inadequate and hampered by the lack of awareness of such (modern) practices, high
costs and impracticality especially in the case of small land holdings. While the
supply side (both quantum and quality of production) and chain development has nor
been able to keep pace with time, the demand side trends have been quite attractive
with changing consumer preferences which are fast catching up with those of the
developed economies. There is thus a significant gap between the supply side and
demand side of the agri value chain.
Taking into consideration the ground reality and the existing gaps, YES BANK and
Wageningen University Research Centre have joined hands to bundle in investment
and technology needed to facilitate the transformation of Indian agriculture to
“agribusiness” by the conceptualization and implementation of Integrated Agro food
Parks in India on a globally competitive scale.
Indu Projects Ltd (a leading project development company based in South India) has
been identified as anchor investor for this path breaking initiative. The Integrated
Agrofood Park’s would be developed at four locations in Andhra Pradesh and
Maharashtra (to start with) and progressively scaled up to several other locations in
Southern and Western India over a period of time. It is estimated that the investment
outlay for setting up the Agroparks in the four locations alone would be in excess of
Rs.1500 crore.
On implementation, these parks would integrate channels to link the ‘farm gate to the
food plate’ by the putting in place the desired agricultural practices, systems,
infrastructure and technology to the farmers thus facilitating the availability of the
desired farm produce to the demand side of the food chain.
“Integrated Agro Food Parks” would not only serve to provide the integral material
supply linkage to the processing industry but also integrate farmers with the demand
4
side of the food chain in an efficient manner. It is our strong belief that successful
replication of such models across strategic production hubs for key agricultural
commodities can lead to the transition of Indian Agriculture and Processing Food
Industry from an un-organised, supply-driven and low–value business scenario to an
organised, high-tech, safe demand-led, and high-value business scenario while
creating substantial gainful employment for the rural masses.
The key infrastructural components in the Integrated Agroparks would include the
central processing unit for food production and processing, warehousing, cold storage,
trade facilitation centre, Agro tourism services, Research and development facilities
and incubation centres (for agro related industries).The focus would be on the system
innovation, design, spatial clustering of the units and total integration of the
agriculture production and processing chains in the Agrofood Parks to bring about
economic benefits to all the key stakeholders linked to parks including farmer
producers by way of reduced wastages, quality maximization and accrued
environmental benefits.
We strongly believe that this developmental effort undertaken by leveraging the
agribusiness domain expertise and knowledge of both Wageningen University
Research Centre and YES BANK would be a landmark and path-breaking initiative,
and further contribute to the development of emerging India..
Mr. Kees Slingerland Mr. Rana Kapoor
CEO Managing Director & CEO
Alterra, Wageningen UR YES BANK Ltd.
The Netherlands India
5
Position and summary of the feasibility study
This report deals with the feasibility of establishing Agroparks on a number of
selected sites in the States of Andra Pradesh, Maharashtra, Karnataka and Tamil
Nadu.
The feasibility study is the second step in a process aiming at successful
implementation and operation of modern Agroparks in India. Execution of this
process has been assigned by Indu Projects ltd, an Indian project developer to a
consortium of Wageningen UR, a Dutch knowledge institute and Yes Bank, an Indian
bank.
Prior to this second step, in step one a longlist of possible sites has been compiled for
which basic data have been collected by teams of management students of the
National Institute of Agricultural Extension Management (MANAGE1) in Hydrabad.
From this longlist a selection has been made of sites deserving a more thorough
evaluation. These sites were visited by an Indo-Dutch team of experts who collected
additional information, made a feasibility analysis for each site, and explored
opportunities to find maximum efficient combinations of agro production, processing,
trade and logistic, education and innovation for the Agropark as a central 'node' in a
wide surrounding so called Eco Intelligent Network of supply and demand.
Chapter 1 of the feasibility report gives an overview of Indian agriculture as a
background to the assignment. It concludes that a transition from a supply driven
system to a demand driven system, transforming all parts of the chains promises a
vast increase of profits to all participants in these chains also because a vast increase
in Indian consumers demands can be expected.
In Chapter 2 general development principles are being elaborated. Key concepts as
Metropolitan Agriculture, Intelligent Eco Networks and Agroparks are put in their
historic context and the potential contribution of these concepts to sustainable
development is highlighted.
Chapter 3 presents an integrated approach for planning agroparks in India in terms of
(i) hardware, i.e. all its fysical aspects; (ii) orgware, which is the way it is organised
internally and in which it has its outside links and (iii) software, which are all aspects
connected to human knowledge, emotions, the way they should be developed and
maintained.
Chapter 4 deals with general aspects of financial analysis and risk assessment that
have been used in the feasibility study.
1 The National Institute of Agricultural Extension Management, popularly known as MANAGE, is an
apex national institute set up in 1987 as an autonomous society under the Ministry of Agriculture,
Government of India, Source: http://manage.gov.in/About/about.htm
6
All this finally leads to the feasibility assessment in Chapter 5. This assessment has
been made of functions to be successfully accommodated in each specific site in
relation to its context and networking opportunities. Based on the results of the team's
evaluation, Indu, who took the initiative to this study, has selected seven sites for
further elaboration
Site Conclusion on feasibility
(1) Amravati (2500 acres)
District Amravati, Maharashtra
(2) Kolar (150 acres)
District Kolar, Karnataka
Go
Consolidation Centre
(3) Palmaner (Phase1: 500 acres)
District Chittoor, Andhra Pradesh
Looks promising. More information
needed on potential of surrounding
agriculture and hydrology
(4) Punganuru (500Acres)
District Chittoor, Andhra Pradesh
Looks promising. More information
needed on potential of surrounding
agriculture and hydrology
(5) Nayudupeta (2000 acres)
District Nellore, Andhra Pradesh
Looks promising. More information
needed on potential of surrounding
agriculture and logistics.
(6) Puduvayal (204 acres)
District Tiruvallur, Tamil Nadu
Go
Consolidation Centre
Following this feasibility analysis, preliminary designs are drawn that give a first
indication of the way an efficient layout for the parks may evolve, and give estimates
of the financial aspects
As a third step in the over all process proper Master Plans will be prepared that will
optimize the functional mix and spatial layout of each site, aiming at maximizing
business opportunities for producers, processors, traders and other entrepreneurs in
the Agropark and its surroundings. Furtheron the functional mix will also serve the
objective of creating a social environment that is conducive to the development of
local farming communities by creating backward linkages, offering training and
education, social services and providing more and better paid job opportunities. And
the parks will contribute to more sustainable practices by minimizing fossil energy
consumption, reducing waste, and carefully managing decreasing water stocks.
Maximizing the business opportunities will be the result of a close cooperation with
interested investors, while improving social and environmental conditions will
involve local communities and NGOs.
Once the Master Plans are in place and all interested parties have expressed their
commitment, as a fourth step implementation will follow, led by Indu as the Agropark
developer. Together with other investing parties Indu will set up management entities
that will finally operate the parks, as the fifth step in the process.
7
In these two last steps flexibility is the crucial issue. Agro entrepreneurs, whether they
are producers or processors, wholesale traders and providers of logistic services or
retailers, product and process or marketing innovators, need a maximum of freedom
to develop their business and adjust it all the time to changing conditions of available
technology, of human resources, and of supply and demand in local and regional as
well as national and global markets. Production, processing and trade in the Agropark
should be integrated but not every combination is possible. Part of the total design in
the phase of Masterplanning will therefore be to elaborate scenarios that show
different combinations of these aspects, as they can be taken up by the entrepreneurs.
The Agropark Master Plans will offer this freedom, while at the same time attaining
an optimal fit in the social and environmental fabric of their surroundings. As such
they fully cover the 'triple P value propositions' that are the test of any successful and
responsible development: People, Profit, and Planet.
8
1 Background of the assignment
1.1 Indian Agribusiness Scenario: Socio Economic Impact
Contributing to about 20 per cent of the national income and providing employment
to nearly 55 per cent of the population, agriculture significantly impacts the Indian
economy. Agriculture and allied sectors such as forestry, logging and fishing
accounted for 18.6% of the GDP in 2005. About 43 % of India's geographical area is
used for agricultural activity and the sector accounts for 8.56 % of India’s exports.
Agriculture has always been a focus area for India’s policy makers and the main
thrust has been towards achieving food security for the nation. However, over the last
couple of decades, India’s economic growth engine has been dominated by the
industry and the service sectors with the agriculture sector witnessing its share in
overall GDP diminish gradually (from 57 % in 1951 to 20 % in 2006). After the initial
gains achieved during the Green Revolution period (in terms of increased food grain
production from 108 mt to 130 mt) which was largely due to enhanced irrigation
facilities, introduction of high – yielding varieties and better nutrient management,
stagnation of both production and productivity has been witnessed over the last
decade. India’s. One of the main reasons for this has been the lack of scale in
agribusiness activities and the acutely fragmented nature of land holdings in India.
Agri processing has been just around 2 per cent of the total agricultural produce and
this has largely been attributed to the associated multi-dimensional problems of lack
of assured raw material of required quality, lack of linkage between productions and
processing centres and lack of appropriate technologies. As a result, the sector has
been left with ever decreasing employment attractiveness and little incentives for the
investment.
The gap between per capita incomes for the agriculture and non – agriculture sectors
is widening and is mainly attributed to the restrictive stance towards the sector
adopted by policy makers since Independence as shown in Figure 1.
9
Figure 1: Restrictive Policy Framework affecting Agriculture
While India remains a net agricultural produce exporter, the country is enormously
dependent on imports as far as processed foods are concerned. Taking cognizance of
this fact, the Government has taken several initiatives to step up the processing levels
and set itself an annual food processing growth target of 7%; an aggressive target
given the low base in food processing.
Socioeconomic, Social & Technological Analysis of Indian Agriculture
Agricultural Sector is the mainstay of the rural Indian economy around which socio-
economic privileges revolve and any change in its structure is likely to have a
corresponding impact on the existing pattern of Social equity.
Careful analysis of the Indian agribusiness sector points to the following:
There has been a distorted investment climate with slowing public investment
and rising subsidies (both direct and indirect) over the years.
Prevalence of a distorted incentive structures which has been affecting input
selection & management as well as output priorities.
Increased private participation through contract farming arrangements in the
recent years.
Low growth rates in the agricultural sector despite the formulation of a
National farm policy with a growth target of 4% for agriculture
A restrictive policyframework
Poor rural infrastructure& connectivity & an
Inefficient agri – marketingSupply chain
Inadequate access to credit and poor
credit deliverywhere available
A distorted investment Situation : Slowing
public Investment &
rising subsidies
Fragmented land holding with
Inadequate economics of scale
Distorted incentive structures
affecting input selection & management as well
as output priorities.
A restrictive policyframework
Poor rural infrastructure& connectivity & an
Inefficient agri – marketingSupply chain
Inadequate access to credit and poor
credit deliverywhere available
A distorted investment Situation : Slowing
public Investment &
rising subsidies
Fragmented land holding with
Inadequate economics of scale
Distorted incentive structures
affecting input selection & management as well
as output priorities.
10
Economic Analysis
Indian Agriculture accounts for almost one fifth of the overall economic
output.
From 3.5 % in the post – Green Revolution era, which saw a wider
technological diffusion of improved agri – practices, growth slowed to as little
as 1.8 – 2.0 % in the 1990s and beyond.
Figure 2: Agriculture GDP Growth (1951 – 2005)
Credit to the Agriculture sector has doubled in the last three years (mainly
dominated by the short term credit largely for managing agri – production
cycles)
Globalization of the Indian economy has made a significant impact on the
agricultural sector. While some regions (and farmers) have been able to
benefit from market liberalization, as well as from new inflows of investments
and technology, others have had difficulty in adjusting to the new open
economy, particularly due to the impact prices of imported agricultural
products.
2.7 2.83.5
2.1
4.0
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Pre - Green
Revolution
(1951 - 65)
Green
Revolution
(1965 - 80)
Wider Tech
diffusion (1980
- 95)
Post -economic
reforms (1995
- 05)
The agri
challenge (2005
- 20)
AG
RI
GD
P G
RO
WT
H (
% C
AG
R)
11
Social Analysis
Nearly sixty percent of the population is engaged in agriculture production for
their sustenance and livelihood.
India’s non – farm rural sector already supports 47 % of the 136 m rural
households. Some 27 % are, still dependent on agriculture, with only 20 % not
affected by the farm sector.
Figure 3: India’s Income dependence
Marginal holdings constitute 70 % of overall land holdings as a result of the
combined effect of regulatory (land ceiling regulations) and demographic
factors (breakdown of joint family units and parental transfer).
Technological Analysis
Enhanced irrigation facilities to enhance double cropping and increase gross
sown area.
Introduction of high yielding varieties (better seeds)
Better nutrient management (balanced usage of fertilizers)
Application of frontier sciences like bio-technology, remote sensing
technologies, pre and post-harvest technologies, energy saving technologies,
technology for environmental protection through national research system as
well as proprietary research.
Good network of agricultural research institutions like State Agriculture
Universities, extension agencies like KVKs, Non-Governmental Organizations
(NGOs), Farmers Organizations, Cooperatives, corporate sector and para-
technicians.
Regionalization of agricultural research, based on identified agro-climatic
zones, will be accorded high priority.
Non agri
dependent , 20%
Indirectly agri
dependent, 27%
Directly agri
dependent , 53%
12
Policy Initiatives
Agricultural laws in India govern everything from input & output prices to offtake, as
well as storage, trading and marketing norms. Though they were designed to address
food security and protect the agriculture community from the exploitation, these laws
and regulations are now been proven less useful as shown in Figure 4.
Figure 4: Outlived Policy Interventions in Agriculture
The structural problems in Indian agriculture have been exacerbated by the slowdown
in investment in the sector – investment in agriculture that now amounts to a mere 1.7
% of GDP. Surprisingly, the bulk of that is private investment, mostly by farmers
themselves on mechanization, seeds and irrigation linkages. Public investment in the
recent years has fallen from an already low 1 % in the mid 1980s to as little as 0.5%.
The declining public investment has coincided with a stark increase in input subsidies
(i.e fertilizers, power and irrigation).
With the fragmented and inefficient agri-supply chain being further burdened with
lack of predictability, absence of scale, high transport cost and inefficiencies in
domestic logistics and intermediation, integration of production and distribution
channels (for backward and forward linkages) and consolidation (for economies of
scale) as the central value propositions seems to emerge as the solution for revamping
the traditional supply driven agricultural system to a more organized and demand
driven system. The associated investments in processing technologies & knowledge
and skill development is likely to catalyze and catapult growth of the sector.
Despite being the largest sector of the economy in terms of work force, the
Agriculture sector remains severely underfinanced and short of technology and skills.
With existing growth levers (area and yield improvements), the government is
focused on achieving this goal by promoting value addition, increasing the market
orientation of the sector, enhancing public investments, encouraging private
participation, facilitating access to key inputs and leveraging research and technology.
The effective interlinking of these initiatives as shown in Figure 5 is being undertaken
to devise a more conducive policy framework.
Land holdings
Input Selection
Crop Selection
Marketing Movement Sale
Rural land ceiling acts do
disallowconsolidation
ofland holdings.
Nitrogenfertilisers arepriced cheaper.
Support prices
of different crops
define cropselection by
farmers
Only government
notified market places were
allowedtill recently.
Free movement of goods was not
allowed till recently.
“Essential Commodities”haveMarket sale quotas.
External Trade
Tariffs & export
subsidies coexist
Land holdings
Input Selection
Crop Selection
Marketing Movement Sale
Rural land ceiling acts do
disallowconsolidation
ofland holdings.
Nitrogenfertilisers arepriced cheaper.
Support prices
of different crops
define cropselection by
farmers
Only government
notified market places were
allowedtill recently.
Free movement of goods was not
allowed till recently.
“Essential Commodities”haveMarket sale quotas.
External Trade
Tariffs & export
subsidies coexist
13
Figure 5: The Changing Face of Indian Agriculture
During the recent times, time, Government has fine – tuned the policy and investment
priorities to make the Indian agriculture globally competitive However, agriculture
being a state subject largely, there are variations from state to state in the level of
commitment and measures taken for developing the agriculture sector. The
Government initiatives are now primarily aimed at bringing about regulatory reforms
and infrastructure development (particularly in agricultural marketing) and enabling
private sector investment in infrastructure creation.
Change in policy mindset
A move to make laws collaborative & not prescriptive; redefining role as an enabler.Focus on integrating agricultural markets with the rest of the economy.Legal reforms on marketing, storage & transportation already underway.Modification of APMC Acts in several states to facilitate direct access to farmers.
Targeted Investments
Greater & more targeted public investments in agriculture.Bharat Nirman programme to improve rural infrastructure & connectivity.Coordinated investment in strengthening the agri – supply chain in partnership with private sector; storage capacity, cold chains and market expansion on track
Greater private & corporate participation
Building public – private partnership in agriculture & developing linkages with industry.Policy incentives for greater participation in value added sectors.Market instructions & incentive structures liberalized to facilitate private participationSeveral corporates are chalking out their agri – strategies.
Quantum jump in credit
availability & delievery.
Low – cost credit availability for farmers for investment, crop management.Formal credit availability to agriculture doubled over FY 04 -07.Corporate banks tapping into rural credit market with innovative delievery channels. Post harvest collateralized loans have started picking up.
Change in policy mindset
A move to make laws collaborative & not prescriptive; redefining role as an enabler.Focus on integrating agricultural markets with the rest of the economy.Legal reforms on marketing, storage & transportation already underway.Modification of APMC Acts in several states to facilitate direct access to farmers.
Targeted Investments
Greater & more targeted public investments in agriculture.Bharat Nirman programme to improve rural infrastructure & connectivity.Coordinated investment in strengthening the agri – supply chain in partnership with private sector; storage capacity, cold chains and market expansion on track
Greater private & corporate participation
Building public – private partnership in agriculture & developing linkages with industry.Policy incentives for greater participation in value added sectors.Market instructions & incentive structures liberalized to facilitate private participationSeveral corporates are chalking out their agri – strategies.
Quantum jump in credit
availability & delievery.
Low – cost credit availability for farmers for investment, crop management.Formal credit availability to agriculture doubled over FY 04 -07.Corporate banks tapping into rural credit market with innovative delievery channels. Post harvest collateralized loans have started picking up.
14
Figure 6: Key Ares impacting Indian Agriculture
Government of India has floated several schemes related to Marketing Infrastructure
and Post Harvest Management in the past as summarized in the table (table 1) below.
Ten states have already modified their APMC acts, while 15 more are in the process
of reforming their legislations. Allowing end users to have direct contact with the
farming community weeds out inefficiencies in the current monopolistic structure.
Direct access has also set the stage for direct marketing and even contract farming,
which facilitates even higher private participation and create much needed linkages
with industry for creating world – class agri businesses. Various ministries as shown
in Figure 7 like Ministry of Agriculture, Ministry of Food Processing, Ministry of
Commerce, Ministry of Rural Development etc have devised suitable schemes in this
regard as shown in table 1.
Agriculture
Marketing
Warehousing Act
APMC & Model Act
SHG Participation
Co-operative Movement
Processing
Agmark Grading Rules
Seed Quality & Processing
Farm Implements
& Machinery
Consumption
MRL Monitoring
Pesticide Dosage
Drug Standardization,
Inventory & Regulation IPM, INM
Procurement
Seed Act
Fertilizer Act
Pesticide Act
Land Consolidation
Contract Farmer
Plant Quarantine Act
Capacity Building
Institutional Credit
Panchayati Raj
Rural Business Hubs
Extension Education
15
Figure 7: Ministries involved in the development of agriculture.
Ministry of Food
Processing
National Cooperative
Development
Corporation
Ministry of
Commerce
(APEDA)
Ministry of Rural
Development
Ministries
Ministry of
Agriculture
National
Horticulture Board
National
Horticulture Mission
Department of
Agriculture &
Cooperation
Dept of Animal
Husbandry,
Dairying & Fisheries
SFAC
16
17
S No Name of the Govt. Scheme Implementing Agency/Dept Objective
1 Gramin Bhandaran Yojana
Ministry of Agriculture,
Department of Agriculture and Cooperation,
Directorate of Marketing and Inspection
(DMI)
To create the scientific storage capacity with allied facilities in rural areas to meet
the requirement of farmers for storing the farm produce
2
Development of Agricultural
marketing Infrastructure, Grading
& Standardization
Ministry of Agriculture,
Department of Agriculture and Cooperation,
Directorate of Marketing and Inspection
(DMI)
To develop marketing infrastructure to cater the post harvest requirement of
production and marketable surplus of various farm products
3 Marketing Research and
Information Network
Ministry of Agriculture,
Department of Agriculture and Cooperation,
Directorate of Marketing and Inspection
(DMI)
To establish a nation wide information net work for speedy collection and
dissemination of Agriculture related market information
4 Rural Business Hub (RBH) Ministry of Panchayati Raj,
CII
A group of entrepreneurs including farmers and artisans working together to improve
/ refine the locally available resources and produce goods to enable larger market
access
5 Mega Food Parks Ministry of Food Processing Industries To provide a mechanism to bring farmers, processors and retailers together and link
agricultural production to the market
6 Technology Mission of India Department of Agriculture and Cooperation The focus is Market Research and promotion
7
Development of Commercial
Horticulture through Production
and Post- Harvest Management
National Horticulture Board(NHB) To develop post –harvest management infrastructure and to improve linkages
between horticulture producers and marketers
8
Capital investment subsidy
scheme for construction/
expansion/ modernization of cold
storages/ storage of Horticulture
produce
National Horticulture Board (NHB) To promote setting up, modernization, rehabilitation of cold storages for reducing
post harvest losses and creation of cold chain infrastructure
9 Market Information Service for
horticulture crops National Horticulture Board (NHB)
To generate information on wholesale prices on arrivals and trends in various
markets in the country for important fruits, vegetables and flowers, etc.
10 National Horticulture Mission,
(NHM)
Ministry of Agriculture, Department of
Agriculture & Cooperation Post harvest management and creation of market infrastructure
11
Scheme for Agri-business
Development through Venture
Capital Assistance and Project
Development Facility
Small Farmers Agribusiness Consortium
(SFAC)
To strengthen backward linkages of Agri-business projects with producers, To
facilitate setting up of agribusiness ventures, to catalyze private investment in setting
up of agribusiness projects.
12 Scheme for technology up-
gradation / Establishment
Ministry of Food Processing
Set up / Expansion / Modernization of FPI
Table 1: Schemes formulated by various ministries for development of Indian Agriculture
18
/Modernization of FPI
13
Scheme for Quality assurance ,
Codex standards and research &
Development
Ministry of Food Processing
1. Promotion of quality assurance/safety concept.
2. Promotion of quality assurance/safety concept.
3. Bar-coding.
4. Strengthening of the Codex Cell
5. Setting up of Quality Control Laboratory.
6. Research and Development in Processed Food Sector.
14
Scheme for Back ward and
forward integration and other
promotional
Ministry of Food Processing
1. Backward linkage
2. Forward Integration
3. 3. Promotional activities through exhibition fairs.
15 Scheme for Infrastructure
Development Ministry of Food Processing
1. Food Parks
2. Packaging Center
3. Integrated Cold Chain Facilities
4. Value Added Center
16 Scheme for Infrastructure
Development Ministry of Commerce (APEDA)
1. Establishment of common infrastructure facilities
2. Assistance for purchase of specialized transport units
3. Assistance to exporters/producers/growers/Cooperative organization for
mechanization of harvest, storage, grading facilities.
17 Scheme for Market Development Ministry of Commerce (APEDA) Development of packaging standards and design, assistance to do market research,
marketing promotion
18 Agri Export Zones (AEZ) Ministry of Commerce (APEDA)
Promoting export of specific produce/products grown in a contiguous area, with the
objective of providing remunerative returns of farmers on sustained basis by
improved access to exports.
19 Marketing Development
Assistance (MDA) Scheme
Ministry of Commerce
Assistance for exporters for export promotion activities
20 Marketing Access Initiative (MAI)
Scheme
Ministry of Commerce
To support Export Promotion Organization / Trade Promotion Organizations in
undertaking market studies/survey for evolving proper strategies
21 Schemes for Quality Development
Ministry of Commerce
A) Assistance to exporters, producers, trade associations, public institutions etc. for
setting up / strengthening laboratories. ii) Assistance to exporters & producers for
installing quality management, quality assurance and quality control system such as
ISO series, HACCP, TQM etc. including consultancy, quality improvement and
certification for these. iii) Activities related to standardization and quality control
such as preparation of quality assurance manuals, guidelines, documents, standards,
upgradation and recognition of labs for export testing, certifying exporters as
Premium Quality Exporters etc. pesticide management program, national and
international standardization activities. iv) Upgradation and recognition of labs for
export testing. v) Testing of water, soil residues of pesticide, veterinary drugs,
hormones, toxins contaminants in agricultural produce / products.
19
B)i) Assistance to growers and manufacture, exporter & export related organization
for upgradation of technical and managerial personnel through training in India,
excluding the cost of travel.ii) Assistance to recognized associations of
growers/exporters for organising seminars/group activities including study tour
within the country and for bringing out information literature .iii) Seminars
organized by APEDA.iv) Assistance programme for study tour sponsored or
organized by APEDA abroad. the assistance would be restricted to such activities
that have correlation with exports.
22 Schemes for Research and
Development Ministry of Commerce
1. Assistance to support Research and development for export efforts through R &
D organizations in Government sector
2. Assistance to exporters, Trade Associations, Cooperative institutions etc. to
support relevant research & development for export enhancement thought R &
D organizations in co-operative/ private sector.
23 Swarnajayanti Gram Swarojgar
Yojana (SGSY) Ministry of Rural Development
1. To bring the assisted poor families (Swarojgaris) above the poverty line by
providing them income generating assets through a mix of bank credit and
governmental subsidy.
2. One of the main feature of the programme relating to marketing is the marketing
support with emphasis on market research , up gradation /diversification of
products , packaging, creation of market facilities etc.
24
IDDP (Integrated Dairy
Development Project Modified in
march , 2005 as Integrated Dairy
Development Project
Ministry of Agriculture
Deptt of Animal Husbandry, Dairying &
fisheries
Procurement, processing and marketing of milk in a cost effective manner
25
Dairy/Poultry Venture Capital
Fund.
Ministry of Agriculture
Deptt of Animal Husbandry, Dairying &
fisheries
1. Purchase of dairy processing equipment, establishment of dairy product
transportation facilities including cold chain and cold storage facilities for milk
and milk products.
2. Bring measures like milk processing at village level and marketing of
pasteurized milk in a cost effective manner.
26
Development of marine Fisheries,
Infrastructure and Post Harvest
Operations.
Ministry of Agriculture
Deptt of Animal Husbandry, Dairying &
fisheries
Development of Post Harvest Infrastructure.
27
Modern Terminal Markets
Ministry of Agriculture (Under National
Horticulture Mission scheme)
1. To integrate farm production with buyers by offering multiple choices to
farmers for sale of produce such as electronic auctioning and facility for direct
sale to exporter, processor and retail chain network under a single roof.
2. To storage infrastructure thus offering the choice to trade at a future date to the
participants.
3. Encourage private sector participation in marketing activities through a Public-
20
Private-Partnership Mode
29
--- National Cooperative Development
Corporation
Planning, promoting and financing programmes for production, processing,
marketing, storage, export and import of agricultural produce, food stuffs, certain
other notified commodities
21
Private Sector Initiatives
The government’s concerted efforts to liberalize agriculture over the next few years will lead to
resurgence in consumption, investment and trade priorities, driven by policy adjustment,
increasing private – sector participation and higher incomes. Multiple beneficiaries will be
affected through these structural changes as shown in Figure 8. Not only, the government’s
liberalization programmes and focus on greater value – add could nudge the agriculture growth
rate from 2.0 % to 4 5 target over the next five years, also the greater private participation could
play a major role in boosting this growth trajectory.
Figure 8: Array of Multiple Players Affected by Resurgence in Agriculture.
As per the data compiled by the Central Statistical Organization, private sector investment
measured in terms of Gross Capital Formation (GCF) (at constant 1999-2000 prices) in the
agriculture and allied sectors has increased from Rs.43,035 crore in 2003-04 to Rs.46,215 crore
in 2004-05 and further to Rs.49,987 crore in 2005-06. Much of the private investment has
actually been undertaken by farmers themselves (micro – irrigation, investments in farm
equipments and livestock). A favourable regulatory environment has attracted the interest of
several large corporates of late. While corporate intervention in upstream agricultural activities
(Farm Input & Farm Machinery players) the recent times have witnessed a spurt in business
initiatives by other industry players as well (including FMCG, diversified business groups and
conglomerates). ITC's e-choupal is such an initiative and endeavours to offer an integrated
bundle of services (ranging from facilitation in technical help on package of agricultural
practices, supply of key inputs such as fertilisers and pesticides to rural distribution of products
and insurance products) to the farming community.
A wide spectrum
of beneficiaries
Food processing, high value
foods & horticulture
Consumption (FCMG & durables
themes)
Agri – inputs, Rural infrastructure &
supply chain
Retailing & Food Services.
Banks and rural credit vehicles.
A wide spectrum
of beneficiaries
Food processing, high value
foods & horticulture
Consumption (FCMG & durables
themes)
Agri – inputs, Rural infrastructure &
supply chain
Retailing & Food Services.
Banks and rural credit vehicles.
22
The emergence of organized retailing in recent years and creation of quality retail space has led
to an increased demand for quality produce and thereby investment in supply chain infrastructure
interventions by players such as Snowman Frozen Foods (recently acquired by Gateway district
parks, which was a joint venture between the Mitsubishi Group, Amalgam Foods and HLL)
which committed significant investments in the cold chain.
Corporate investment in the farming sector especially in the horticulture and food – processing
sectors has increased substantially in the recent years and has reached the inflection point with
several large corporates such as ITC, the Tata Group and Godrej beginning to invest
significantly. The entry of large business conglomerates such as Reliance Industries and Bharti is
likely to attract greater investments and expected to create a cascading effect across the small
and the medium enterprises (SME) segment of the food and agri space. These will also open up
vast avenues for agri – business growth, crop diversification, access to modern technology and
efficiency gains will also see farm incomes rise and could unleash a new phase of consumption.
Foreign Direct Investment (FDI) in Agriculture
The present policy for FDI in Agriculture and Plantation sector is as under:
i. FDI up to 100% is permitted under the automatic route only in the under-mentioned
activities viz. Floriculture, Horticulture, Development of Seeds, Animal Husbandry,
Pisciculture, Aqua-culture and Cultivation of Vegetables & Mushrooms, under controlled
conditions and services related to agro and allied sectors
ii. FDI up to 100% with prior Government approval is permitted in Tea plantation subject to
the conditions of divestment of 26% equity of the company in favour of an Indian
partner/ Indian public within a period of five years; and prior approval of the State
Government concerned in case of any future land use change.
iii. Besides the above two, FDI is not allowed in any other agricultural sector/activity.
1.2 From supply driven to demand driven agriculture
Most of today’s small farmers face serious problems: adverse climatic and geographical
conditions (especially shortage of water), tradition based selection of products in stead of a
versatile market orientation, quality shortfalls and excessive wastage, difficult transportation to
collection points, lack of information on prices (both over time and geographically), limited
access to credit and so on. As a result farmers’ incomes stay far behind overall economic
development, while it becomes more and more difficult to provide sufficient quantity and quality
of food to the urban population with its rapid growth in numbers and wealth. Integrated chain
management as a solution to these problems needs to reach both backward (towards the farmers)
and forward (towards the urban consumers) along the chain, covering all links between the two
ends. Overall, what is needed is a transition from a supply driven system to a demand driven
system, transforming all parts of the chain, from primary production through the various stages
of transportation and processing, to final delivery to wholesale and consumer markets, at first
nearby but increasingly also reaching out to a national and even a global level. Such a
transformation holds the promise of a vast increase of profits to all participants: farmers,
intermediate traders, processing industries, wholesale and retail organisations, exporters, service
providers, financial institutions.
23
1.3 Demand forecast
The Indian food industry is estimated to be worth over INR 8000 billion ( Euro 145 bn) and
according to the Confederation of Indian Industry (CII) is expected to grow to INR 12400 billion
(Euro 225 bn) by 2015. India is one of the world's major food producers but accounts for less
than 1.5 per cent of international food trade. This indicates vast scope for both investors and
exporters.
India is the world's second largest producer of food next to China, and has the potential of being
the biggest with the food and agricultural sector. In this respect, the country is endowed with a
large production base for a variety of raw materials covering food crops, commercial crops and
fibres due to its varied agro-climatic conditions.
Processed food market is the most important segment of the food industry accounting for over 32
per cent of the total food market. While India has an abundant supply of food, the food
processing industry is still nascent: only two per cent of fruit and vegetables; and 15 per cent of
milk produced are processed.
The share of value added products in processed food consumption will grow from 38% (INR
1,800 bn / Euro 33 bn) to 58% (INR 7,800 bn / Euro 142 bn). In order to achieve the market
potential, the investment required in capacity creation and setting up requisite infrastructure is
INR 997 bn ( Euro 18 bn) in the organized sector until 2015 (INR 560 bn / Euro 10 billion in the
period 2005- 2010 and INR 437 bn / Euro 9 bn in the period 2010 and 2015).
The demand forecasts for the various processed food segments have been outlined below:
1) Fruit and Vegetable (F & V) based products
Consumer Demand for fresh F&V is estimated at INR 600 Billion (Euro 11 bn) at 1993-94
prices and is growing at a CAGR of 11%. Of this growth of 11%, 1.9% is contributed by
population growth while the remaining 9% is contributed by increase in per capita expenditure.
Only 2 % of the production is processed into various categories including jams, pickles, RTEs,
chips, concentrates etc. Fresh packed F&V, primarily an export led business, is a large industry
in India, and is growing rapidly at a CAGR of over 13% during the last 5 years. There has been
an increase in proportion of graded, packed F&V. The focus on specific varieties for different
markets has increased in the past, exports were primarily targeted at the Indian ethnic population
while now, and Indian exports compete with other global suppliers across markets, to cater to a
broader spectrum of world demand.
The level of processing for fruits and vegetables is expected to increase to 10% and 15% in 2010
and 2015 respectively primarily as a result of increasing population, growing income and
changing consumer preferences towards processed and convenience products, This will drive
increase in market size to INR 290 bn ( Euro 5.3 bn) in 2010 and INR 546 bn (Euro 9.9 bn) in
2015.
2) Dairy
India ranks first in the world in milk production, which rose from 17 million tons in 1950-51 to
around 100 mi. tons by 2006-07. By 2011, the value of the dairy industry will double to INR
5208 billion (Euro 95 bn), which includes INR 1597 billion (Euro 29 bn) from liquid milk, INR
427 billion (Euro 7.7 bn) from ghee, INR 505 billion ( Euro 9.2 bn) from khoa/chhana/paneer,
INR 91 billion ( Euro 1.6 bn) from milk powder, INR 22.5 billion (Euro 0.4 bn) from table
butter, INR 61.5 billion (Euro 1.1 bn) from cheese/edible casein and INR 2505 billion (Euro 45
24
bn) from other products. Out of the anticipated milk output of 120 mt, the share of liquid milk
will rise to 81 per cent or 97.5 mt and only the rest 19 per cent (22.5 mt) would get converted
into products. But the organized industry’s share of total milk handling will go up to 30 per cent
(36 mt), while the small players will see their share dip to 22 per cent (26 mt). At the same time,
higher rural incomes will marginally boost the share of milk retained in rural areas to 48 per cent
or 58 mt.
3) Edible Oils
The size of the Indian oilseeds-based sector is estimated at INR 610 Bn (Euro 11bn) (Inclusive
of export/imports). The price of edible oils is the key driver of demand. Domestic price support
policies have favoured the production of crops that compete with oilseeds, such as rice and
wheat, resulting in waning oilseed production. Consumer demand for edible oils is estimated at
INR 300 bn (Euro 5.5 bn) at 1993-94 prices, growing at a CAGR of 6.4%. Population growth
accounts for 1.9% of this growth, while the remaining 4.5% is due to increase in per capita
expenditure on oils. The trade policy reforms in the mid 1990s fuelled the increase in edible oil
imports, which now meet 40-45% of India’s consumption requirements. India will continue to
depend on imports in the future, mainly of crude palm oil/palmolein and crude soybean oil, as
these have been the lowest-price options.
Edible oil demand is expected to grow by 5.5 to 6% per annum over the next ten years, with a
consumption of 15.2 and 20.2 million tonnes by the end of 2010 and 2015 respectively.
Branded edible oil growth is expected to be significantly higher than overall sector growth. With
increasing incomes and quality consciousness, the branded oil segment is expected to grow at
12% annually. Owing to its competitive pricing, soybean oil’s share is likely to grow from its
present 30% to 45% among branded refined oils within the next five years. The share of branded
edible oils could increase further from the projected 16% by 2015 from the current level of 9.2%.
The branded edible oils segment is estimated to grow to INR 173.9bn (Euro 3.2 bn), from the
current level of INR 50bn (Euro 0.9 bn).
4) Fisheries
India has vast coastline of 8118 km and its fish production has increased from 0.75 mi. tons in
1950-51 to 6.50 mi. tons in 2005-06 and exports about 0.5 mi. tons. Domestic demand for fish is
likely to grow at an annual rate of 2.4 per cent between 2004 and 2010. The highest growth in
demand is projected for major carps (3.9 per cent), followed by fresh water fisheries (3.8 %),
pelagic low value and demersal low value (2.0 per cent each). Domestic demand for export-
oriented fish products is likely to decline, on account of the expectation of higher selling prices.
The domestic demand for fish will be about 7 mn tonnes by 2010.
The processing segment of the fisheries sector in India is entirely export-oriented. Fish
processing for domestic consumption is rare, as consumers prefer to purchase fish from wet
markets and process it at home. Industrial processing is primary, even for exports, comprising of
conventional block frozen products, individual quick frozen products (IQF), minced fish
products like fish sausage, cakes, cutlets, pastes, surimi, texturised products and dry fish etc. The
high end processed products in international market include tempura, sushi shrimps, prepared
and preserved marine products, dried, salted and brined products and steamed and boiled
products.
The processing level in fisheries is expected to increase to 15% in 2010 and further to 20% by
2015. The value added segment of shrimp is expected grow faster at 15% until 2010 and 12%
subsequently to 2015. Robust growth is projected for processed marine products segment as
25
well, driven by a mix of value and volume growth. This translates into a market size of INR 151
bn (Euro 2.7 bn) and INR 274 (Euro 5 bn) bn in 2010 and 2015 respectively
5) Non – alcoholic beverages
The tea industry can achieve a size of INR 136bn (Euro 2.5 bn) by 2010 and INR 211 bn (Euro
3.8 bn) by 2015. This will be on account of yield improvement, restoration of production growth,
improved product mix in export and domestic markets (increase share of orthodox tea in
production, from 10% to 14% by 2010 and 17% by 2015, increased share of exports in branded,
packed form from 22 % to 36 % by 2010 & 45 % by 2015 and increased share of packaged
segment from current levels to 60% by 2010 and 70% by 2015. The above would require
cumulative investments of INR 53 bn (Euro 0.96 bn) by 2010 and further INR15 bn (Euro 0.3
bn) by 2015
Indian coffee has tremendous potential to establish itself as a producer of specialty and high
value coffees. The specialty coffee segment is expected to grow at 25%, which will be targeted
at overseas markets. The instant coffee segment is expected to grow by over 10 %.
The packaged drinking water market in India is really growing very fast. Estimates of the market
size do vary owing to huge number of unorganized and regional players in the market. However,
it is believed that the domestic bottled water industry is around INR 15-18 billion (Euro 0.3 – 0.4
bn) in size and growing at the rate of around 40% per annum. This is way ahead of the growth
rate of 8% reported for global market as a whole in 2006. The domestic demand has increased
from 2 million cases in 1990 to an estimated 68 million cases by 2006. In fact, India is estimated
to be the 10th largest bottled water consumer in the world. As the purchasing power and health
and hygiene consciousness of Indian consumers improves, the consumption per person is likely
to grow exponentially. Not surprisingly, the market is estimated to reach the INR 50 billion
(Euro 0.9 bn) mark by 2010.
6) Confectionary
The size of the Indian confectionery and chocolate market is estimated at INR 26.0 billion (Euro
0.5 bn). Sugar confectionery accounts for 61% of this market, with the balance being chocolates
and mints & gums. The market for chocolate has grown at 12% annually over the last decade.
Growth has been more rapid in line with increased disposable incomes and higher spending
power on impulse categories such as chocolate.
Sugar and sugar-based products are expected to grow from INR 261 bn (Euro 4.7 bn) to INR 373
bn (Euro 6.8 bn) by 2010 and INR 516 bn (Euro 9.4 bn) in 2015. While growth in the sugar
sector will be driven by higher volumes, the confectionery and chocolate segment will expand on
account of increased volumes as well as increased value addition. Innovation, increased
consumption of health products and growing consumption of confectionaries as snacks would be
the major growth factors of this segment. While the confectionery segment will grow nearly 6-
fold by 2015, the chocolate segment will grow 7 fold over the same period.
7) Beer & Wine Industry
India has the world's second most populous nation, but when it comes to beer consumption, it
barely figures on the map—leaving plenty of upside growth. Annual per capita consumption
stands at just 0.6 liters, or about a pint, compared with 23 liters in China, an average of 73 across
Europe, and 78 in the U.S.
The Indian beer market has been estimated at 85.9 mn cases in 2002 – 03. Beer consumption has
been growing at a CAGR of 7.5% for the last 9 years, while the growth was 11 % in 2002 – 03.
26
This has been attributed to changing perceptions of alcohol as socially acceptable product, wide
range of products availability and changing taxation structures & opening of distribution
channels have fuelled the growth of this sector. The beer sector is expected to record growth of
15% p.a. till 2010 and 12% p.a. between 2010 and 2015. This implies that the beer segment
would achieve volumes of 18 mn bl by 2010 and 31 mn bl by 2015.
The Indian wine market is estimated to be INR 2.6 bn (Euro 0.05 bn) and has grown at over 20%
(CAGR) over the period 1998-03, while in value terms, the growth has been over 25% in the
same period. The domestic wine industry has the potential to grow to INR 50 bn (Euro 0.9 bn)
by 2010 and INR 90 bn (Euro 1.6 bn) by 2015. In a scenario, when the export market will remain
competitive on account of new markets, India can niche for its wines in line with the increasing
preference of Indian foods. The investment required in wine sector is estimated at INR 4.7
billion (Euro 0.08 bn) till 2010 and INR 4 bn (Euro 0.07 bn) between 2010 & 2015. Further,
Indian wine consumption is very low compared to other countries. Estimates say, per capita
consumption of wine in India is about 4.5 ml per year. In comparison, France consumes 42 litre
per person per year, and China 375 ml adding strength to the projections.
8) Meat and Poultry
The meat production in India is placed at No. 8 position in the world. India produces about 4.9
million tones of meat annually valued at INR 190 billion (Euro 3.5 bn), and has grown @ 4.5%
during the last two decades. However, during the last five years, this segment has been growing
very fast at the rate of 27% annually because of government intervention and private players.
India is likely to be among the fastest growing meat consumption nations, due to rising
affordability, population growth, and conversion from vegetarianism. The processing level for
buffalo meat is assumed to increase from 21% to 35% in 2010 and 45% in 2015. Similarly, the
processing level of poultry is assumed to increase from 6% to 15% in 2010 and 25% in 2015.
This translates into market potential of INR 86 bn (Euro 1.6 bn) for buffalo meat and INR 105 bn
(Euro1.9 bn) for processed poultry in a ten-year time frame. This requires an investment of INR
17 bn (Euro 0.3 bn) in buffalo meat and INR 2 bn (Euro 0.04 bn) in poultry processing.
9) Bakery products
India has a vast market for bakery products which includes bread, biscuits, pastries, cakes, buns,
rusk etc having estimated annual production of 50 lakh tonnes in 2004-05 with estimated value
of INR 69 billion (Euro 1.3 bn) . The two major bakery industries, viz., bread and biscuit account
for about 82 per cent of the total bakery products. The organised sector has a market share of 45
per cent and the balance 55 per cent is with the unorganised sector in the baked products, as per a
recent FICCI report.
The bread industry with estimated production of 27 lakh tonnes in 2004-05 and having 7.5 per
cent growth is represented by both the organised and unorganised sectors with 55 per cent and 45
per cent contribution to production.
Bread, biscuits and grain based snacks are the key grain processed sectors in India. Grain-based
products are expected to grow from the current size of INR 1466 bn (Euro 27 bn) to 2090 bn
(Euro 38 bn) in 2010 and INR 3092 bn (Euro 56 bn) in 2015. The total investments required
would be INR 124 bn (Euro 2.3 bn) till 2015.
27
2 Development principles
2.1 Historical background of metropolitan agriculture
Urbanisation and changing agricultural markets
The world is urbanizing. In the next few years more than half the world population will be living
in cities. Many of these cities are typical Delta metropoles usurping the space most suited for
agricultural production. Consumers, many of whom are living in these metropoles, demand high
quality of food and food production methods, forcing retailers into competition on food
availabilty and food safety. But more and more also on quality control, transparancy, eco-
efficiency and ethical issues like child labour, human (farmers and workers) rights and in some
parts of the western world on animal welfare. In this situation reliable chains that provide the
main fresh products are becoming of strategic importance. And it is not only food, feed,
vegetables and fruits that moedrn consumers demand. Traditional agricultural commodities as
fuels and fibers are in focus again. But most promising are the markets for flowers, flagrances,
flavours, functional foods and pharmaceuticals. In economic terms their world demand is not
inelastic, as the demand for traditional food products. Many of these products are in the fast
growing markets of luxury goods.
Intelligent Eco Networks and Agroparks as system innovations
We propose Intelligent Eco Networks and Agroparks as innovative concepts for solutions on the
problems that agriculture in metropolitan areas meet. As design-concepts they have been
developed in Northwestern Europe. But the concepts, if elaborated tailor made, prove to deliver
useful solutions for countries all over the world, including China and India. From a historical
viewpoint Intelligent Eco Clusters and Agroparks can be described as the fourth stage in the long
term development of agriculture..
From subsistence agriculture to
commercial agriculture
It started with subsistence agriculture
where people (not farmers) produced in
small communities everything that they
needed almost without any labour
division that was based on other than
personal characteristics between men,
women and children. In the latter phase
of this stage a labour divison came into
being, based on physical power, as
warriors forced the producers to pay a
tax for their protection agains other
warriors.
28
Cash crops for market
The second stage in the evolution of
agriculture starts with the spatial
division between cities and
countryside.
The first cities developed in naturally
fertile regions where sedentary
agriculture developed early and could
already sustain a relatively dense
population. These early cities were
centres of power protecting the
countryside and asking some kind of
tribute from the farmers in return.
They were also the markets where
farmers could sell their surplus
products and buy those necessities that they couldn't produce themselves. Cities of this type
originated in the Yangtze, Indus and Ganges river valleys, the valley of the Tigris and Euphrates,
the Nile valley and so on.
In later stages other types of cities arose: sea-borne trade cities and capitals of colonial empires,
industrial agglomerations based on available raw materials, metropolitan cities as nodes in global
transportation and communication networks. Though some of these were less dependent on food
production in their direct surroundings, most were still situated in intensively cultivated fertile
coastal or fluvial plains as well.
Production in chains
In the third stage agriculture got
intertwined with industrial production.
Using more and more fossil energy in
stead of human and animal labour and
using industrially products like
fertilisers and pesticides. And
processing its products before bringing
them to the market. Primary production
became part of a production chain ad in
itself became more and more
specialised. Out of the classical mixed
farm that produced a great variety of
products grew a large number of highly
specialised farms that concentrate on
only one product in the chain, like piglets, milk, fertilised eggs or one species of orchid. Part of
these specialist holdings kept their traditional land dependency like the arable farms producing
cash crops and many extensive livestock farms. But others became footloose. Applying the Von
Thünen rules in extreme, greenhouse farmers multiplied their land productivity while intensive
livestock farmers started buying their feed on the market. But while the production techniques of
these footloose farms became more and more industrialised, the spatial organisation of the farms
still kept the scattered structure of the traditional farmland in which they originated. And because
these devlopments, following Von Thünens rules, took place in the densely populated rural areas
around cities and metropoles, conflicts arose around environmental issues like smell, emissions
of ammonia, fine dust, pesticide leaching, light pollution from greenhouses and heavy traffic
29
intensity. Footloose farmers were not very fast in admitting the problems they caused. The bad
image that arose from this was aggrevated by scandals on bad quality, food safety and animal
welfare.
This spatially disorganized, environmentally not very well performing, footloose agriculture with
a bad image was the starting point for the jump innovation effort to design agroparks. It was a
joint undertaking in the Netherlands by entrepreneurs, knowledge institutes and governmental
organisations. Some environmental NGO's reject the line of thinking. They see the further
development of what they call bio-industry as pricipally wrong. Others share the perspectives but
keep a critical distance.
From the urban pespective, until recently the relation between city and countryside in these
fertile regions was mutually beneficial. For city dwellers sufficient food was available, for which
they were willing to pay a good price to the farmer. And on the city market, with its huge variety
of products on offer, the farmer could buy cheaply what he needed, but could not produce
himself. Since a few decades, however, this beneficial relation is under heavy pressure. In many
regions now city growth is so fast (sometimes as high as 5 to 10%, with the biggest conurbations
attracting as many as a million new inhabitants a year) that much more farmland is occupied by
urban expansion than, under present conditions, can ever be compensated by productivity
growth. Thousands of farmers lose their land and are driven to a precarious existence in the city,
while the capacity dwindles to grow sufficient food to meet the demands of the sky rocketing
number of city dwellers.
An entirely new symbiosis between agriculture and urban development is needed to avert
catastrophes. It should be based on more controlled urban growth on the one hand (higher
densities, more efficient infrastructure, less sprawl) and a ‘quantum leap’ in agricultural
productivity on the other. The latter needs an approach in which improved basic production and
primary and secondary processing, more efficient logistics, and sophisticated marketing and
financing go hand in hand, based on the concept of integrated food chain management As
already stated the concepts of Intelligent Eco Networks and Agroparks play a crucial role in this
transformation towards ‘metropolitan agriculture’.
Metropolitan Agriculture
Metropolitan agriculture is the knowledge driven, complex network of agroproduction,
processing, trade and logistics that has been developing in and around the nodes of the global
network economy since 1970. One of its core areas can be found in the Northwestern European
metropolitan delta, in The Netherlands, Flanders and Northrhine Westphalia.
In Northwestern Europe, because of its intense urbanization and its critical citizens and
consumers, the agroproduction sector is being forced to sustainable development of the complete
spectrum of intensive agricultural production that deliver reasonable to sometimes high profits
while at the same time respecting planet and people aspects and delivering the quality which
consumers demand. And it works! The Netherlands, with only 0.5% of the area of India, is the
third largest exporter of agroproducts in the whole world in terms of export value.
Embracing sustainable development as a key concept means putting innovation central. A good
example of this is the recent shift of the North Limburg Region in Northwestern Europe from
focus on economic development and employment to the "cradle to cradle" concept as introduced
by Braungart et al. Keywords in cradle to cradle are the shift in focus from efficiency to
effectiveness, from trying to be zero and maximising sustainability to celebrating human beings
and sustainable development, from a control mode to a design mode.
30
2.2 Agroparks as part of Intelligent Eco Networks
Agroparks
Agroparks are the fourth stage in the evolution of agriculture: They optimize not only the
product objective from the chains they organize. In connecting different chains together to
networks by focussing on the rest and byproducts from these chains, they turn waste from one
into food for another.
An agropark is a systems innovation in
the concept of metropolitan
agroproduction agroprocessing and
agrologistics. It is the spatial clustering
of different agrochains (like plant,
freshwater and livestock production),
combined with non-agro functions. Its
large scale of production enables the
application of industrial processing
techniques and of principles of
industrial ecology, i.e. mutual use of
waste and by-products. The spatial
clustering reduces transport and by
doing so, veterinary risks. The main
innovation of the agropark is the
demand driven combination and integration of various agricultural activities. The demonstration
park will show novel products and services and if there is a market potential for these products
they will be brought in by trade or produced within the park. Within the park primary production
and especially processing of these products, aim at the end of the production and trade chains
where usually most surplus value is generated.
An agropark includes production and processing of plants, mushrooms and all kind of animal
products. Whenever possible it should be combined with other elements of these production
chains, like feedmills, breeders, food processors but also with non agro-production like energy
producers, waste processors or water managers. A Central Processing Unit or CPU enables the
agroparks’ strong focus on industrial ecology and in return, enables sustainable innovations of
the agricultural activities. The CPU’s main function is to combine and proces biomass waste
flows to valuable materials and energy. The CPU works best if connected to semi-closed or
closed stables, greenhouses and other production facilities, most of them climate controlled. This
leads to increased productivity at lower costs. Moreover it reduces infection pressures and the
use of chemicals and thus adds strongly to product quality. The CPU is an entreprise on its own.
It continuously seeks for improved integration of the production chains inside and outside the
park.
Intelligent Eco Networks
In its food, fashion and other combined chains, an agropark aimes at maximising added value
within its borders. Because the production of most modern consumer products like TV-dinners,
functional foods or special occasion flower gifts requires many basic products, the controlled
input of raw materials and other inputs in the whole production chain within the park will always
remain necessary. This means trade and also this trade should be designed to perform on an
optimal scale. But since the entreprises within the park operate independently, trade also includes
the management of waste, biomass and bioproducts through the CPU.
31
Through trade on the input and output side and also on the basis an agropark becoms connected
to suppliers, other agroparks and retailers, together forming a logistic network that in general
terms can be characterised as an Intelligent Eco Network (IEN). Seen from the perspective of the
producer an agropark delivers its products throughout the whole year as efficient as possible,
independent of season and land. Seen from the demand side an agropark acts as a Consolidation
Centre serving a metropolitan market in a consumer responsive way throughout the whole year.
Seasonal products not available from local producers are being supplied from storage or by trade.
Part of the tradepark will be a business centre. It will offer specialized services to help get
commerce up and running. Added to this are general services like hotels, restaurants, travel
agencies and retail stores and there are also government services: a Chamber of Commerce and
the one-stop window, where all the needed permits can be arranged once someone is ready to
start doing business.
After production, processing and trade, the fourth element to be included would be
demonstration of high quality safe food and other agroproducts. The demonstration park will
show intensive facility agriculture, including methods for preventing infections (and thus
minimization of chemicals use) in high-tech closed systems as greenhouses and stables. These
principles of the Agropark will in the demonstration park be shown in a small-scale laboratory
set-up. This aspect contains the demonstration of new products to consumers that innovative
entrepreneurs seek but also the demonstration of the agropark results, in terms of education and
research aiming at the scientific wprld and the other interested professionals. But also as a whole
to the public that is basically and in general terms very interested to see where its food is being
produced. Again optimally designed as function in itself all events of the demonstration park are
an entreprize in itself but closely connected. Elsewhere in the park, large scale production
facilities will be open for public, although direct contact between visitors on the one side and
workers, animals and plants on the other will be reduced to a minimum to prevent
contaminations.
2.3 Sustainable development
People, planet and profit
In many development schemes social (‘people’), environmental (‘planet’) and economic
(‘profit’) goals are conflicting. As an example an industrial activity may derive its profitability
from exploiting its labourers, or, the other way round, social equity and welfare measures may
stifle economic innovation and result in poor economic growth. As another example, there may
be profitable economic activities that may even take good care of their workers, but deplete
natural resources, pollute the environment and contribute considerably to the greenhouse effect.
In order to attain sustainable development these conflicting relations should be turned into
relations of mutual benefit: no development in one field, either of profit, or people, or planet
should be permitted that harms either one of the two other fields, while those developments
should be favoured, and hence stimulated, that are beneficial to two – or even all three – fields
at the same time.
Agroparks should be designed to fulfil these conditions of sustainable development, and can do
so successfully, if they take the following concepts of sustainable development as a starting
point:
32
o Regarding the Planet aspect: shift the focus from production chains towards integrated flows
of energy and matter and from the agricultural plot to the landscape in which agroproduction
is one of the functions.
o Regarding the People aspect: shift from focus on the technical production system towards
focus on employment, human resource management and knowledge management.
o Regarding the Profit aspect: focus on the integral production network and look for improved
chain relations, cost reduction and quality management.
People
What agroparks as centres for rural transformation have to offer on the ‘people’ dimension is
mainly higher incomes for small farmers and traders, more job opportunities for farmers and
landless workers that moved to metropolitan areas and generally improved living conditions for
the rural population as a whole. Additionally, by demonstrating new production techniques and
dissimination of high quality seeding material, the yields, the working practices and education
level of the farmers will improve.
Agroparks also serve the interests of the urban population, especially the growing middle class
segment, by offering better (tastier, healthier) and more varied food which moreover is easier to
purchase and prepare, and need not necessarily be much more expensive than the present poor
quality that is available in urban markets. The rapidly rising purchasing power of the urban
middle class, and their willingness to spend money on better food, creates a wealth of
opportunities to make profit by adding value along the downstream part of the chain linking
primary production to final consumption, in an ever more differentiated range of processing,
distribution and trading activities. In a similar way along the upstream part of the chain improved
incomes for small farmers and traders inject purchasing power into the rural economy, increasing
profits for all kinds of supporting economic activities in villages and small towns.
There is a linkage to the planet dimension as well. Often unsustainable practices in traditional
agriculture are the result of poverty, because farmers don’t have the capacity to invest in
technology that saves energy, fertilizer or pesticides, or reduces waste, even though in the long
run these investments would lead to higher incomes. Once their general income situation and
their access to reliable credit improves, these ‘planet-friendly’ investments will come within
reach and will further improve their situation.
Planet
A second central feature of agroparks is its aim at environmental goals: maximum possible
closure of water- and mineral cycles and minimizing the use of fossil fuels. Water is prevented
from evaporation or just run off but stays within a closed system where it is purified and fed
back into the process after each production cycle. In this way excess pesticides will not reach the
environment and fertilizer or manure minerals that have not been absorbed in the growth process
may be re-used. Other wastes are not discharged on the environment either but are used for
energy production (e.g. biogas production from manure or slaughterhouse waste) or as inputs for
other production processes (e.g. use of reprocessed digestate from biogas production as
fertiliser).. A fully developed agropark doesn’t need fossil fuel (and hence on balance doesn’t
produce carbon dioxide), doesn’t pollute its environment, and doesn’t use more water than is
available from annual rainfall, without depleting groundwater stocks.
To begin with all this needs investing in high-end technology. As fossil fuel prices continue to
rise already the savings on fuel, fertiliser and pesticides will will result in extra costs reductions
and thus start to contribute to higher profitability. Moreover reduction of the use of pesticides is
also beneficial to the health, both of farmers and consumers, which is positive on the ‘people’
33
dimension. Further on profits, as compared to production processes that do not meet these
sustainability standards, will rise even higher once compensation needs to be paid for carbon
dioxide emissions, or for depletion of ground water resources.
Profit
In a sustainable development profit doesn’t stand on its own but is closely related to the two
other dimensions. Profit that is sustainable for the long term derives from a real and permanent
improvement of the living conditions of people and of the state of the environment. So according
to what has already been stated above, the above-average profitability of an agropark, is the
result of the agropark characteristics:
It leads to higher yields for farmers and traders in the surrounding area and generally
revitalises the rural economy;
It captures the added value of higher prices: the growing middle class is willing to pay higher
prices for better food. Many parties along the chain may share in the business opportunities
offered by this vast and rapidly growing reservoir of purchasing power;
It greatly saves on the costs of energy and of spillage and waste, as well as the costs of
correcting or compensating damage to the environment.
It reduces transport and therefore transport costs, and because of reduced transport there are:
o Lower veterinary and phytosanitary risks.
o Lowering emissions and waste, resulting in environmental benefits.
o Higher production through improved animal welfare.
Investments in sustainable solutions will be possible because of the scale-size of the park.
Process
Finally, the complexity of a design that puts the integration of the triple-P aspects central, urges
for a focus on a fourth P: that of Process. A carefull process design is needed, not only during
planning and implementation but also during operation with regard to monitoring and evaluation
and to quality management and growth.
34
3 Integrated approach for planning agroparks in India
To summarise the chapter 1: agriculture in India is facing both very serious problems and highly
promising opportunities. The problems are mainly related to the slow improvement of incomes
and general conditions of life among small scale traditional farmers and traders and to traditional
production practices that are not meeting criteria of sustainable development, especially with
regard to the management of water resources. These problems are compounded by the way
climate change works out for India generally and for the southern States of Maharashtra, Andhra
Pradesh, Karnataka, Tamil Nadu and Kerala specifically.
The opportunities result from the rapid economic growth in India and the emergence of an ever
more numerous and affluent middle class. Opportunities also follow from India’s geographic
position, in South- and East-Asia and in the world, especially from the fact that India’s per capita
amount of arable land is no less then three times larger than China’s. India could be a major
exporter of agricultural produce, to China but also to Middle Eastern, European and American
markets.
To solve these problems and seize the opportunities agroparks would offer an extraordinary
powerful instrument. On the one hand they serve as centres for the transformation of vast rural
areas. They can offer extension services to traditional farmers, helping them to enhance the
quality of their products and to work under more sustainable conditions, such as avoiding
spillage of fuel, fertiliser and pesticides, or excess exploitation of the water system. They can
also offer easier access to credit and to better technology (e.g. cooling facilities keeping their
produce fresh while being transported to collection centres). They can also offer improved
logistic services and assist farmers in being more responsive to changes in market demand so as
to fetch better prices.
On the other hand agroparks serve to capture the value added for which the middle class in India
and abroad is willing to pay. They guarantee better quality and much more variety especially in
processed products. These meet the demand for convenience food, the out-of-home market,
export markets and so on. In India Agroparks would act as centres for the collection of basic
products from the surrounding countryside, as well as for primary production and advanced
processing, conditioned storage, trade and distribution. Agroparks could also tap into world
market flows of, for instance, animal feed or other low-value materials and integrate these in a
regional network of production and processing that generates export products of much higher
value.
All of this added value contributes to economic growth in general and percolates into the
agricultural sector, thus bridging the income gap with the industrial and service sectors that is
now growing at such an alarming rate.
35
Taylor made design of hard, org, software
The design of an agropark should not only be of its hardware, i.e. all its fysical aspects like
spatial layout, buildings, landscape ecology etc. Even more complicated is its orgware, which is
the way it is organised internally and in which it has its outside links, again not only physical but
also to the administrative and juridical context in which it is operating. And probably most
complex is its software, which are all aspects connected to human knowledge, emotions, the way
they should be developed and maintained. The table below gives an overview.
3.1 Hardware aspects
For agroparks to serve all these purposes, their position in Intelligent Eco Networks is crucial:
networks of regional producers, of nation-wide and world-wide flows of basic materials, of
modern forms of wholesale an retail trade and logistics, of emerging urban middle class markets
and of consumers in global markets. And next to their position in these physical networks,
agroparks also serve as centres for research and development, for dissemination of knowledge
and experience, small and medium business support, for finance and insurance, marketing and
branding, and so on. And they serve as focal points for improvement of social conditions (health,
education, empowerment of disenfranchised groups, job opportunities, etc) in rural areas in
general.
In the network primary products in a region are collected in collection centres that double as
rural transformation centres. From the collection centres products are transferred to a
consolidation centre; from the consolidation centre they are distributed to customers such as
supermarkets, restaurants, hospitals, etc. Flows from collection centres to a consolidation centre
consist of homogeneous loads, arriving at regular intervals. Flows from a consolidation centre to
customers consist of mixed loads of a composition that exactly meets the customer's needs and
36
are delivered just when they are wanted. Primary products from the region may be supplemented
by either internal production on the premises of the consolidation centre or by products
originating from the world market. In this way year round delivery to customers is guaranteed as
well as permanent occupation of processing and transportation facilities.
Next to these consumer oriented consolidation centres, there are export oriented centres that
work in much the same way, with one important difference: output flows are homogeneous and
normally depart at regular intervals, just as input flows arriving from collection centres.
Positioning in the network: location requirements
Each of the three types of centre may establish the core of an agropark:
Agroparks with a collection centre/rural transformation centre as its core
Agroparks with a consolidation centre as its core
Agroparks with an export centre as its core
Agroparks of the collection centre/rural transformation centre type need a rich region serving as
a ‘catchment area’. The size of the region depends on the degree of specialisation: the more
specialised, the easier it is to reach the critical mass needed for full efficiency of the
transportation and primary processing facilities of the collection centre. From this point of view
it may be worthwhile to encourage specialisation in suitable regions. Further on, dependent on
the perishability of the products, the collection centre needs either to be close or may be located
further away from a consolidation or export centre.
For agroparks of the consolidation centre type the number and distance of its customers is
critical. This means that consolidation centres need to cater to metropolitan markets
(concentrations of at least 3 million inhabitants) and need be located within a maximum of about
one hour of the majority of potential customers in such a metropolis. What distance may be
covered within an hour depends on the quality of the transportation (mainly road) infrastructure.
In practice, given congestion-free four-lane freeways, beltways, etc. from the centre of the
metropolitan area the distance should not surpass about 80 kilometers. For supplementary
imported products a railway link or a link to an international airport or seaport is important.
For agroparks of the export centre type the most important location factor is a seaport with
regular container links to major ports around the world. In some cases also a secondary seaport
may suffice, either as part of a network of short sea shipping lines, or as a 'spoke' in an efficient
hub-and-spoke system. For perishable products of high value added air transportation is also an
option, either by dedicated cargo planes, or by wide-bodied passenger planes. Cargo planes may
call at a large number of relatively small and simple regional airports, while wide body
passenger planes are restricted to a limited number of big international airports. For export to
other states on the Indian subcontinent also railway transportation is offering an opportunity, so a
link to the national railway system is a location factor as well.
In the same way as for consolidation centres, provided that enough space is available and site
conditions are suitable (relief, soil, water availability, present occupation, availability of labour,
etc), also for collection centres and export centres additional production in the park itself may be
combined with the products collected from the surroundings or with imports.
Adoption of best global and domestic best practices to the local context
Intelligent Eco Networks and Agroparks are never a one size fits all solution. Actually not one of
them will probably be like another. In our designs our first objective is to restore and develop
the connection between the network of footloose agricultural production and processing chains
37
and its surrounding landscape by carefully designing the water management, infrastucture and its
landscape ecological connections of the site where the park is. In India critical succes factors
with respect to this include water in relation to temperature, soil quality and the maximum use of
solar energy.
The second objective is to fit the five economic aspects of the agropark (production, processing,
trade, logistics and demonstration) into the specific local and regional economic environment,
where the agropark should be established. In India this means that we first concentrate on
processing plants, logistics and on trade because there is no shortage of primary products. But
only 1% of Indian agricultural production is being processed and up to 40% of specific products
harvests go lost before they reach the consumer. So introducing processing, logistics and trade
facilities would be quickest way to create surplus value. In second instance production facilities
and demonstration and R&D facilities could be added. Added to this central agropark a system
of decentralised primary agricenters must be set up to collect products from the primary
producers. The three schemes below give the general concept. Agroparks for a better world
AFP
Modern Farm Clusters
Green Houses
Livestock farms
Mushroom Nursery FP ZonesUtilities &
Services
Commercial
Complex
R&D
Incubation
QCL
Commissaries &
Packaging
Social
Infrastructure
Agribusiness
Mgt. Trg. Inst
Convention Center
IT/ Library
Training Center
Agro tourism
Wellness &
Nutrition
Terminal Markets
Logistics
Cold Stores
Ripening Chambers
Warehousing
Primary
Agri
Centers
Primary
Agri
Centers
Primary
Agri
Centers
Primary
Agri
Centers
ProductionProcessing
R
&
D
Trade
Soci
al
Agropark
Agropark: Combining production, processing, R&D, Trade and Social Functions
RuralTransformation
Centre
RuralTransformation
Centre
RuralTransformation
Centre
RuralTransformation
Centre
Agroparks for a better world
Primary
Agri
CentersAt Mandal Level
Popln: 5000 - 10000
Agri Clinic
Collection Center
Mentoring
Training
Farm Credit
Micro Finance
Primary Health
Center
Commercial
Rural Mart.
Office Space
Smart Card
Green Port
Realty
Food &
Entertainment
Village
VillageVillage
Village
Rural Transformation Centre: Combining Collection and storage offarmers products with rural development services
RuralTransformation
Centre
38
Intelligent Eco Networks combining Consolidation Centres, Agroparks and Rural Transformation Centres.
METROPOLE
METR
OP
OLE
Consolidation Centre
Agroproduction-and processing
Park
RuralTransformation
Centre
Dependent on the specific situation, the agropark could be more focussed on:
Local collection and processing of agricultural products (collection centre/rural
transformation centre type agropark)
Sourcing retail of a metropole (consolidation centre type agropark)
Processing and exporting, localised near a harbour (export centre type agropark).
3.2 Special focus: sustainable management of natural resources
Introduction
Efficient and sustainable use of natural resources is a sine qua non for development, especially
for agriculture in India, where two-thirds of the cropped area is dependent on rainfall without
protective irrigation facilities. The promotion of appropriate technologies and development
strategies in rain fed regions could potentially result in multiple benefits such as ensuring food
security, enhancing viability of farming and improving ecological conditions.
Land degradation is becoming a serious threat across the country requiring urgent attention. With
the increasing pressure of the growing human and cattle population, deforestation, erosion of
soil, indiscriminate use of chemical fertilisers, pesticides and also of water, a severe threat has
been caused to the eco-system. Already about 15% of India’s geographical area may be defined
as degraded.
The poor natural resources base contributes to the poverty of the inland area: poor soils, low and
erratic rainfall, limited infrastructure and irrigation, often declining groundwater. Water supply is
the key variable affecting cropping pattern and intensity. Where irrigation is possible paddy and
ground-nut are the main crops cultivated. Where irrigation is not available, maize, millet, pulses
(e.g. red gram) are cultivated. In rain fed fields farmers are exposed to a major economic risk if
the monsoon fails.
Agroparks
Agroparks make limited use of space by combining different functions on the same location:
multiple use of space. A distinction can be made between the agroparks themselves and the
39
surrounding area that will be involved as the supply area of fresh products and raw materials.
Natural resource management on the agroparks will be implemented according to international
standards. The same principle will be applied to the surrounding supply area by promoting
natural resources management in the supply chain. Agroparks form thus centre pieces within the
landscape in which they are situated. All principles for natural resource management that will be
developed and applied for the agroparks will therefore be extended to the surroundings as well.
By deliberately restricting the use of natural resources within agroparks, competing claims on
these resources are prevented. Especially for water this requires a combination of smart design
and re-circulation of water within the agropark. Similar principles apply to energy management,
land (soil) management and management of biodiversity. As an example we focus in this
paragraph on the water situation in the state of Andhra Pradesh.
Water
The only renewable water resource in Andhra Pradesh is the rainfall which varies from 700 to
1200 mm on a yearly basis. Average rainfall of the state is 928 mm.
In most of Andhra Pradesh, except for the south-eastern part, the monsoon season with rainfall is
from June till October. Due to the erratic behaviour of the monsoon season, farmers depend on
additional irrigation during this period. Together, three major rivers: Godavari, Krishna and
Pennar, drain 70% of the land. Even these are highly seasonal. More than 90% of the total flow
occurs between June and December and, just as rainfall, varies greatly from year to year.
Therefore, construction of storage dams is a prerequisite for sustainable irrigation development.
About 40% of the cropped area is irrigated contributing about 60% to the State’s agricultural
output. Here the major share of agricultural growth has occurred. Rehabilitation and sustained
development of irrigation infrastructure and expansion in backward and drought prone regions
are thus of paramount importance. Irrigation has resulted in alleviation of poverty in upland and
backward areas, providing sustained income to farmers, increasing wage employment and
availability of water for human and cattle consumption and industrial activities.
40
State watershed development polcy
Andhra Pradesh has a well established watershed development policy which has six stated
technical aims:
Regenerate, preserve and utilise natural resources (water, soils and vegetation) sustainably
Improve catchment protection, reduce erosion, improve moisture retention in priority
catchments
Ensure community participation throughout the project cycle
Establish and strengthen local institutions supporting the local population.
Increase employment opportunities and level and security of incomes including those of poor
families and landless and women
Increase alternative livelihood opportunities with specific focus on women, poor and landless
There has been a recent increase in borewell drilling in dry areas of Andhra Pradesh, as a
proliferation of machinery has forced down the cost. This increase in borewells has led to an
increase in the irrigated area. There is concern, however, that in conjunction with unreliable rains
over the last decade, increased groundwater extraction may be unsustainable, without effective
rainwater harvesting. Although there is little systematic data so far, groundwater levels are felt to
be declining in many areas (see figure below).
Water based development principles for agroparks
The problem analysis for water resources indicates the following needs to be taken into account,
when developing agroparks and their surroundings.
For agroparks:
Relying as much as possible on rainwater in the park by rainwater harvesting on all
impervious surfaces (including grass roofs, etc.)
Combination of functions in the park such as landscape functions and water infiltration
Use of unconventional water resources, like wastewater from cities
41
Smart design of the water cycle and buffers
For the surrounding areas (the context):
Introduction of water (and energy) saving technologies for irrigation
Stimulating low water requiring crops
Ending subsidising irrigation through free electricity.
3.3 Orgware aspects
Organization Structure for the Agroparks
In organizational terms, there are two options available:
Departmentalization and
SPV/Subsidiary
In line with the above, the following options are available to Indu Group for AFPs–
a) GreenPort India as a division of Indu group and the individual parks being divisions/
departments of GreenPort India – This arrangement has the advantage of getting the direct
benefit of being part of the Indu group and the time required for this set up is also very short.
However this is not feasible in terms of best management practices as the AFP project being a
green field project will expose Indu group extensively to the associated risks. The project focus
and the project management skills would be diluted being part of a much larger and diversified
company. Moreover this will reduce the salability of the parks to investors and lenders due to
aggregation and thereby increasing the ticket size.
b) GreenPort India as a division of Indu group while the individual parks are separate
entities/SPVs – While this arrangement will partially reduce Indu group’s risk exposure, the
salability issue will not get addressed entirely as the holding company will still not be able to get
into joint ventures. Moreover, the focus that a project of this complexity requires will still not be
there.
c) GreenPort India is a separate entity/SPV and the individual parks are its divisions – This
arrangement protects Indu group from the risk emanating from this project and management
focus is also there. However, it is advisable to keep the individual parks also in separate entities
for reducing the investment ticket size and protecting each park from risk arising in the other.
d) GreenPort India is a separate entity/SPV and the individual parks are also separate
entity/ SPV – As illustrated below, each AFP will be a stand alone entity in itself in the form of
a special purpose vehicle (SPV). Each of them would be a body corporate (a private limited
company) created to meet the project objectives, primarily to isolate financial risk, usually
bankruptcy and get tax benefits – if any.
42
Indicative organization structure for the Agroparks:
The considerations for the deciding on ownership and management structure of the AFP
initiatives are:
Facilitate equity participation by global and domestic investors
Facilitate debt infusion from domestic as well as international institutions
Mitigation of implementation and operation risk
Increase flexibility to suite investor interest
Leveraging on the government sponsored schemes and incentives
GreenPort India Corporation This company will be an SPV of the Indu group for execution of the AFP initiatives. This SPV
(GreenPort India Corporation) will invest into three individual SPVs - each located in a distinct
area. Thus project at each site will be stand alone and will have a unique identity.
The advantages of an SPV structure are:
1. Focus – the management of the AFP initiatives will be focused on it and not be frequently
required to attend to the requirements of Indu group.
2. Risk mitigation for Indu –The project, due to its uniqueness to Indian context, entails
considerable risk and therefore needs to be separated from the rest of the operations of Indu
group. Executing this project under an SPV affords this protection.
3. Technical Collaboration – The creation of a SPV will enable creation of technical
collaborations as any such collaboration will be specifically for the project and not for Indu
group as a whole.
4. Funding – The project, due to its unique nature and high risk factor will attract interest from
only those investors (both equity as well as debt) who have either deep understanding of
industry dynamics or from investors with high risk appetite and as such is significantly
different investment opportunity compared to Indu group’s other projects. Therefore it is
only logical to separate this entity from rest of the group.
The disadvantages of an SPV structure are:
1. Risk concentration for the project – The SPV will be high focused on very specific kind of
project; therefore there will be no opportunity of risk diversification.
2. Benefit of being part of the Indu group reduced – The SPV creation will protect the Indu
group from the contingencies arising out of this project and the corollary is that the benefits
GreenPort India India Corporation
(Responsible for implementation of the projects)
Food Park Site 1 (Company holding
the real estate and
managing the park
post implementation)
Food Park Site 2 (Company holding
the real estate and
managing the park
post implementation)
Food Park Site 3 (Company holding
the real estate and
managing the park
post implementation)
43
of being promoted by a large and established group like Indu, except access to capable
managerial support, will no longer be available to the project.
3. Limited sharing of resources – The creation of a SPV will lead to the need for duplication
several facilities which other wise could have been shared with Indu projects, such as IT
infrastructure, support function structures such as HR etc.
4. Increase in paper work and logistical problems – Creation of a separate SPV instead of a
division will also increase the amount of paper work due regulatory and statutory
requirements that have to be followed separately.
The Three Individual Parks
Each of three parks being developed at a different location should be developed as a separate
SPV.
The advantages of such an arrangement are:
1. Risk separation between different parks – Each park will be an integrated operation designed
with due consideration to the physical environment and expected face problems specific to
itself. However, problems or delays or any other contingencies in one park may have an
impact on the other parks if they are under a single entity. In order to avoid this domino
effect, it is advisable to separate these park separate SPVs Moreover, the parks are not
expected to transact with each other for day to day operations making it easy and cost
effective to separate their operations.
2. Reduction in ticket size for investors and lenders – While scouting for debt and equity
investors, separate SPV structure allows for smaller investment quantum for investors lower
investment appetite.
3. Customized management – As each project is designed to match its environment each project
will have unique set of opportunities and problems and therefore needs focused management.
4. Customized sales pitch to prospective tenants, lenders and investors – Given the unique
design of each park, they would all have park specific “USPs” that is Unique Selling
Proposition. In order to maximize the investment potential, the marketing plan of each park
should take into consideration the specific target audience and it would be better executed if
these parks are under different entities.
The problems in creating separate SPVs for each park
1. Increase in paper work and logistical costs – Due to creation of separate entities there would
be duplication of some of the infrastructure such as support facilities like HR and
Administration etc. Moreover, the creation of separate entities increases paper work arising
from regulatory and statutory requirements.
Information and Communication Technologies (ICT)
Organisational structure: Indu Projects Ltd., (IPL) the parent company for GreenPort India has 8
key departments. Theme Ventures is a division in IPL, headed by Mr. S. Balaji, having interests
in theme based initiatives in agriculture (Agro Food Parks or AFPs), health, aviation and
hospitality sectors. All of the initiatives under Theme Ventures division are executed through an
internal sub division called End-to-End Solutions for which Health, Hospitality, Aviation & AFP
initiatives would become internal customers.
44
At a later date, Theme Ventures could be spun off into a separate entity with IPL having a stake
in Theme ventures. Agro Food Park initiatives would be part of a SPV called GreenPort India.
GreenPort India could have alliances with other companies having similar interests in food
processing, logistics, cold chain etc.,
End-to-End
Solutions
BOARD (Indu Projects Ltd.,)
CEO
Finance Company
Affairs
Business
Development Realty
IT Construction Project Mgmt,
Risk Mgmt
Theme
Ventures
Hospitality
GreenPort India
Health
Aviation
Indu Theme Ventures
End to End
Solutions Health GreenPort
India Hospitality Aviation
45
Offices: Indu Projects Ltd. has four main offices, one at Hyderabad, its Head Quarters, and other
being at New Delhi, Bangalore and Pune. There are many make shift offices at the construction
sites for facilitating marketing & operations.
ERP Projects
IPL is implementing Oracle E-Business Suite (with modules like Financials, Project
Management, Project costing, Procurement, Sales and Marketing etc.,) across its various
departments to have control on its critical operations like:
Advanced Collections
Assets
Cash Management
Enterprise Planning and Budgeting
General Ledger
Internal Controls Manager
Project Costing
Project Management
Payments
Receivables
Loans
Payables
Property Manager
Receivables
Treasury
PriceWaterhouseCoopers (PWC) is implementing the ERP solution for Indu Projects Ltd.
ICT for AFP initiatives
1. AFP initiatives would be handled by a separate SPV (Special Purpose Vehicle) called
GreenPort India.
2. In the event of GreenPort India is spun off as a separate entity, it may not be able to leverage
the strengths of Oracle E-business Suite being implemented for the parent company (IPL).
Instead it has to go for another standalone package.
3. Information management for AFP initiatives have to start from the present study undertaken
by WUR team, YES BANK team and Theme Ventures team.
4. A plan for the same is being proposed here under
Information management for AFP initiative during various phases
End to End Solutions (E2E), part of Theme Ventures will manage the information flow, storage
and archival of data pertaining to AFP. E2E would also manage dynamic content and surveys
conducted on the website. Greenportindia.com domain has been registered for developing online
presence for the AFP initiative.
46
Phase-1 (Project study and documentation) - STATIC content
1. During Phase-1, E2E will collect all the documentation, details pertaining to MoU of IPL
with WUR & YES BANK and will put it on the website for general public.
2. All the presentations (non-classified) and salient features of feasibility report (non-classified)
would be uploaded to the website.
3. The following FAQs would be put up on the website:
a. What is an AFP and how it is different from Indian food park
b. Examples of AFP which are functioning elsewhere in the world
c. Structure of an AFP in International and Indian context
d. Benefits of AFP to and by farming community in India
e. Benefits of AFP for the existing food and agri industries
f. Position of Indian food industry and why it lags behind in spite of having potential
g. Overview of Indian food demand (domestic consumption and for exports)
Phase-2 (Active interaction with stakeholders) – DYNAMIC Content
After the master planning for various AFPs in different parts of India are prepared, it is expected
that several stakeholders would come forward for a dialogue with this initiative and the website
should act as a medium for that. These activities are planned during this phase:
1. A log-in for controlling the data flow to and from AFP website.
2. Users from WUR/Alterra/YES BANK/Theme Ventures should have access rights for the
data that they wish to upload and retrieve.
3. An e-mail service to facilitate information flow among various stakeholders.
AFP Web Site
GreenPortIndia.com
WUR/Alterra/ YES BANK/ Theme
Ventures
Stakeholders
Surveys/feedback/Mai
l
E2E Solutions
STATIC &
DYNAMIC
Content
Log-in access
Share Portal
AFP Web Site
GreenPortIndia.com
WUR/Alterra
YES BANK
Theme Ventures
E2E Solutions
Static
Content
47
Phase-3 (Go-Live and Commissioning of AFP)
During Phase-2, various stakeholders and their respective roles would be defined which would
act as key input for designing Phase-3. In phase-3, GreenPort India would start and
commissioning of the park would take place. Design and data management of AFP would be
done in Phase-2, during which activities of Phase-3 would be planned.
Internal park management ICT & HRM
With the focus on highly productive and high quality food production, well-organised internal
management has high priority. More specific, the adoption and use of modern production and
quality oriented technologies will be integrated in the agroparks.
Optimisation of Agropark operations will includes control of all actors in the production chains:
adequate tuning of production quantities and product quality. ICT systems will be implemented
for controlling and streamlining the operations.
People involved with the agricultural production and processing will need adequate capabilities
in the field of:
High quality and highly productive agriculture/food production.
Inverting production driven agriculture to demand-oriented agriculture: use methods to
steer product growing and ripening.
Food quality management methods (prevent quality loss after harvesting by using
adequate packaging and cooling equipment).
Food products quality sorting.
There will be a need for trainers and advisers (who are not commercially dependent on
selling chemicals or other produce)
48
3.4 Software aspects
AFP is an integrated ecosystem comprising of various knowledge partners from varied
backgrounds. It would generate a vast pool of data, information, knowledge, skill sets etc., and it
is of prime importance for the administration of AFP to direct this flow into an efficient
knowledge management database.
This chapter outlines the need for a framework of software aspects of Agro Food Parks. Software
deals with the “soft”er issues (like communication, education, extension, training, knowledge
management, human resource management etc.,) which run beneath the AFP organizational
structure.
The software aspects that should be elaborated in each of the Masterplans are:
Education and extension of future workers in the agropark and of farmers, delivering to the
networks
Human Resource Management of these people
Knowledge management
Communication
The target groups of communication are manyfold and need specific elaboration:
o From the perspective of the Rural Transformation Centra farmers and growers are the
main target group
o Within the agropark itself investors and implementors are target group during
implementation. After the agropark becomes operational management and workers are
added
o A different segment consists of the customers: traders, logistic managers and retailers
and of individual consumers and the customers of the out of home markets
o On the institutional level there are governmental and non-gobvernmental organisations,
the knowledge institutions and the generla public through public media.
Communication
Human Resource Management
Education & Extension
Knowledge Management
Software
49
Target groups
Building a database of knowledge requires defining of groups which would be targeted to
capture the knowledge. Broadly these groups can be divided into internal customers and external
customers of AFP. Internal customers could be farmers who produce for and sell to AFP, global
investors who set up their units with in the AFP, strategic partners of AFP, Banks which support
the activities of AFP by financial assistance etc., external customers comprise traders, retailers,
global importers, individual and institutional customers. Govt. of India, various State
Governments which help in setting up of AFP in different parts of India, research institutions,
NGOs, academicians, general public are also part of external customers.
Spreading awareness
Communication between various stakeholders is key activity for taking AFP concept to wider
audience. Demonstration of benefits of AFP involves meeting various stakeholders, making
presentations, showing AV aids, distribution of brochures etc., Farmers need to know the
benefits of growing quality produce as per the needs of the market, investors should know the
potential of markets in India and logistics providers should know the opportunity in AFP supply
chain. These are some of the examples of how communication should play a role in the
ecosystem of AFP. The following table outlines various stakeholders, type of awareness that
needs to be created among them, and modes of communication that would be used.
Farmers/Growers Processors/
Investors
Banks
Customers
- Traders
- Retailers
- Importers
- Logistics
Consumers
- Institutional
-Individual
Government of India, State Govts, Extension Agencies, NGOs, Researchers,
Academicians and General Public
Internal
Customers of
AFP Ecosystem Agro Food Park
External Customers of AFP
50
S.
No
Target Group Create Awareness About Mode of Awareness Creation
1 Farmers/ Growers 1. Improvisation of the existing
technology and adoption of best
practices
2. Benefits of aligning with the AFP
3. Modes of aligning with the AFP
4. Services provided by the AFP
5. Demand side of the value chain
1. Farmer Training Centre
within AFP
2. Site visits to AFP
3. Village campaigns (AV
Vehicles)
4. Pamphlets
5. Advertisement – print, TV,
Internet, Roadshows
6. AFP Website
7. Agri FM Channel
2 Processor-
Investors inside
the AFP
1. Benefits the AFP offers to processor-
investors
2. Mode of investing in the AFP as a
processor
1. Site visits to AFP
2. Meetings/ Presentation
3. AFP Brochure 1
4. AFP Website
3 Processors outside
the AFP
1. Benefits the AFP offers to outside
processors
1. Site visits to AFP
2. AFP Brochure 1
3. AFP Website
4 Investors/ Banks 1. Concept and components of AFP
2. Demand forecast
3. Return over Investment promised
4. Mode of investment
1. Site visits to AFP
2. Meetings/ Presentation
3. AFP Brochure 2
4. AFP Website
5 Extension
Agencies/ NGOs
1. Benefits of AFP for the farming
community
1. Advertisement – print, TV,
Internet, Roadshows
2. AFP Website
6 Traders/ Retailers/
Importers abroad/
Institutional
Consumers
1. Price vis-à-vis quality
2. Capability to supply large quantities
3. Assured supply
4. Reduction in transaction costs
5. Wide range of products
6. Exotic produce
1. Site visits to AFP
2. Meetings/ Presentation
3. AFP Brochure 1
4. AFP Website
7 Logistics
Providers
1. Concept and components of AFP
2.
1.
8 Individual
Consumers
1. AFP Brand and quality 2. Advertisement – print, TV,
Internet, Roadshows
3. AFP Website
9 Government 1. Benefits of AFP for the farming
community
2. Sustainability and environmental
aspects of AFP
3. Overall benefit to the nation
1. Presentations
2. AFP Brochure 1
3. AFP Website
10 Researchers/
Academicians
1. Concept of AFP
2. Technical aspects of AFP
3. Benefits of AFP
1. AFP Website
11 General Public 1. Eco-tourism angle of AFP 1. Advertisement – print, TV,
Internet, Roadshows
2. AFP Website
3. Press reports/ articles
51
Knowledge Management
AFP setup would contain numerous domains of knowledge from agriculture to product handling
to processing to packing to supply chain, each having its own set of data, information,
knowledge and wisdom. Capturing this information across the functions of AFP would require
thorough understanding (of the functions) and devising ways to capture it. Below are some of the
key domains generating information which is stored in soft and hard form.
What information to store? How to capture information? How to store information?
Technology – production and
processing
Notes by different experts Soft and hard forms
Details of the different projects in
the AFP
Notes by the project leaders Soft and hard forms
All presentations on AFP Soft form
All the background work on AFP Soft and hard forms
Results of periodical studies carried
out
Reports by the study team Soft form
Details of the several programmes
conducted
Notes by the programme
coordinator
Soft form
Brochures Soft and hard forms
Advertisements Soft and hard forms
Versions of the websites Soft form
News clippings and articles Soft and hard forms
HRM
People are an important asset for a business and they individually and collectively contribute to
the achievement of objectives of the business. Once AFP starts operations there would be diverse
set of people functioning with in the park. From the master planning stage, people would be
recruited to take up the tasks of the master plan and execution of it. Tier-1 would constitute
middle to senior management, and junior management in Tier-2.
1. Selection and recruitment of the right candidates
Tier 1 employees – recruit before 6 months of operationalization of the AFP
Tier 2 employees - recruit before 3 months of operationalization of the AFP
2. Initial Training and capacity building of the employees
Tier 1 employees: Training by the Consultant and Self learning – pre job and on the job
Tier 2 employees: Training by the Tier 1 employees – pre job and on the job
3. Further training and capacity building of the employees
By the ‘Training and Capacity Building teams’ constituted within the AFP in different
areas
4. Knowledge improvisation
Establishment of ‘Knowledge Management teams’ to devise ways of encouraging
continuous improvements in processes, capture and record such improvements and record
details of owners of such improvements
Training of the ‘Training and Capacity Building teams’ by the owners of the
improvements (coordinated by the ‘Knowledge Management teams’)
Training of the other employees by the ‘Training and Capacity Building teams’
52
4 Considerations for financial feasibility and risk assessment
4.1 Considerations for financial feasibility
Market potential for a city with 1 million inhabitants
Retail prices of fresh food (especially vegetables and fruits) in India diverge a lot because of
differences in quality and storage life. Indicatively, the consumer price of high quality produce is
two to five times the price of a standard quality product. Thus, product quality oriented measures
pay off very well.
As argued in section 2.3 the primary market of consolidation-type business will be the growing
middle and upperclass in a big city (in this example with 1 million inhabitants. The vegetables
and fruits market potential can be estimated from the following assumptions:
40% of the inhabitants are potential customers.
25% of their fruits/vegetables consumption come from the agro park
The total annual fruits and vegetables consumption is 100kg per person per year (as in the
Netherlands).
From these figures follows an annual turnover of 10,000 tons of vegetables/fruits. In addition to
that, export potential can be exploited to increase the turnover (combined with a growing local
market in the coming years).
Production potential in the neighbourhood
Produce grown on the agro park site as well as products from farmers in the neighbourhood can
be collected and processed on the park: collection/rural transformation activities.
The Agro Park will contribute to the productivity and product quality of those farmers through
measures (see chapter 3) like:
nursery/breeding and supplying more suitable plant varieties
training farmers,
advisers,
new packaging and collections systems,
etc.
For a large number of reasons contract farming fits best to these measures.
Based on experiences in the Netherlands it is concluded that collecting in an area within a one-
hour-truck-driving radius (say 40km) is very appropriate. For various product groups the
production potential is estimated as follows (assuming area coverage of 10% per product group
that is 500km 2):
product group annual production potential
vegetables 500,000 ton/y
soy 125,000 ton/y
soy cake 100,000 ton/y
other feed concentrates 250,000 ton/y
grass / hay 500,000 ton/y
When assuming feed consumption per animal like in the Netherlands, the amount of feed
concentrates as mentioned in the above table + 50% (supplied from other regions), is sufficient
53
for annual production of 100,000 to 200,000 tons of meat or eggs. The exact figure depends on
the animal species, feed quality, farming methods, health care, etc.
Alternatively, feed concentrates and grass/hay can be used for dairy (goat or cows). When, in
addition to the feed concentrates 500,000 tons grass or hay per year is used, up to 600,000 tons
of milk can be produced annually.
In practice, combinations of animals will be planned per agropark.
Area needed for activities on the park can be estimated from the following table.
Area need and productivity for intensive agricultural production
Production activity/species annual production per m2
open greenhouse 10 kg/m2
closed greenhouse 60 kg/m2
meat 40 to 130 kg/m2
eggs (layer chicken) 130 kg/m2
dairy (e.g. goat, cows) 400 to 800 kg/m2
Estimate of trading functions on the agropark: reference to Zon Fresh Park in the
Netherlands
A good reference is the Zon Fresh Park in the Netherlands:
The Zon Fresh Park is oriented at supplying mainly vegetables to market of 30 million
consumers in the Netherlands and Germany. Some figures:
Annual product handling 190,000 tons,
Annual turnover 237 million euros (13,000 million inr),
Park area 130 hectare,
Built area about 100 hectare.
Activities on the park include:
Cold storage of fresh vegetable products
Quality selection
Trading and related activities
Semi-processing and packaging etc.,
These types of activities are foreseen in all types of agroparks mentioned in chapter 3.
For an annual turnover of 10,000 tons (supplying vegetables/fruits to a 1 million inhabitants city,
see above), an area of about 20 acres (built area about 12 acres) would be required. About 10
acres of the built area will be cooled, with an estimated energy use of 1 MW (9 million kWh per
year).
Global financial feasibility of storage and trading activities for the reference situation
Main investments: 12 acres buildings (of which 10 acres cooled): 120 million INR
Annual costs
Annual payments for interest (rate 12%) and write-off (write-off period 10 years): 22 million
INR.
Energy costs for cooling (9 million kWh; price 4 INR/kWh): 36 million INR. This can be
produced locally as decribed below.
54
Other costs (like personnel costs, costs of cold transport equipment, etc.) Will be slightly
higher than in traditional trade facilities.
Annual returns
Product prices are expected to lie between average wholesale prices and high-products
quality. Some example prices:
product average price (per kg) high-quality price (per kg)
mango 15 INR 75 INR
tomato 10 INR 22 INR
So, assuming added value of 10 INR per kg product seems realistic. Thus, the added annual
return (with annual sales of 15,000 tons) will be at least 150 million INR.
We conclude that the main activities have a strong financial potential:
Estimated net annual result: 150 – 22 – 36 = 92 million INR.
We are convinced that even when taking account of other costs and risks, a net result of
say 50 million INR remains.
(Costs for ground are site-specific and not part of these calculations).
Related activity: food processing
Particularly for the rural transformation centre type and export type agroparks, food processing
will be an essential element on the agropark. The area use of this industrial activity on the park
will depend on entrepreneurs’ initiatives. With an eye on the large production potential as
explained above, the potential of food processing is even larger than the trading functions
described above. However, because of the uncertainties it will not yet be included in the financial
feasibility.
Cooling need for intensive agricultural production activities
Because of the warm climate, active cooling will be needed to attain the objected high
production rates in the stables/greenhouses. With traditional cooling (airconditioning type), the
energy costs will be too high.
Through use of tailor-made purpose-oriented sustainable cooling concepts, adequate climate
conditions can be generated whereas the energy use is reduced to a minimum.
An integrated design per specific situation is foreseen, which depends on:
Type of application (e.g. Greenhouse or stable, animal species, technical system, etc.),
Climate (indicator for cooling load),
Conditions for sustainable cooling:
o Availability of a water buffer and fresh water supply,
o Climate (suitability for natural cooling methods)
o Sustainable energy production potential (e.g. From biomass) etc.,
Averagely, the energy costs for cooling will be about 10 kWh/m2 closed greenhouse or stable.
Sustainable energy production from biomass
The following types of sustainable energy production are foreseen:
Electricity production through (biogas) fermentation of cow manure (or pig manure) with
food waste and food processing waste. Valuable rest products of this process are:
o Heat, which can be used for drying processes and for sustainable cooling;
o Digestate (comparable to manure), a very valuable fertiliser.
55
Burning, gasification, or other thermic processes. These processes are most suitable for dry
biomass, such as rice straw, flakes, etc. Besides electricity, the following valueable rest
products are produced:
o Heat, which can be used for drying processes and for sustainable cooling;
o Ashes, rich of minerals. To be used as fertiliser.
Systems with sufficient scale size can produce electricity at competitive prices if the supply of
inexpensive biomass is adequately organised.
4.2 Considerations on Risk Management
General
Risk management for agroparks comprises the recognition and assesment of risks involved in its
development and operationalisation as wel as the development of strategies to avoid the risk,
reducing the negative effect of the risk, accept and cope or manage the risks and implement
possible mitigations
There are two main focusses on the risk management for Agroparks:
For financial or legal causes (financial risks and lawsuits and (*)
For physical causes (e.g. Threats caused by environment, natural disasters, technology,
humans, organizations and politics).
*In enterprise risk management a risk is defined as a possible event or circumstance that can
have negative influences on the enterprise in question. Its impact can be on the very existence,
the resources (human and capital), the products and services, or the customers of the enterprise,
as well as external impacts on society, markets, or the environment. In a financial institution,
enterprise risk management is normally thought of as the combination of credit risk, interest rate
risk or asset liability management, market risk, and operational risk.(source: Wikipedia)
Financial risk factors
Syndication Risk
The project it is at the inception stage and financial closure has not been achieved yet. Any delay
in securing the necessary equity or debt infusion may cause delay and as such may be cause of
concern.
Interest Rate Fluctuation
An increase in prevailing Indian or International interest rates could increase the Company’s
borrowing costs with respect to its existing floating rate obligations or new loans, which could
adversely affect the Project’s return potential and results of operations.
Foreign Exchange Fluctuation
An increase in prevailing exchange rate for Indian Rupees vis-à-vis major foreign currencies
could increase the Project’s cost of capital with respect to its existing floating rate obligations or
new loans, which could adversely affect the Project’s return potential and results of operations.
56
Implementation risk factors
Land Quality
Land is the most critical component for building integrated food parks. The land has to be
suitable for the purpose with adequate water supply, fertility, access to fertile agricultural land
for source agricultural produce etc for creation of sustainable and robust food park. The quality
and size of such land parcels will determine the return potential of each park.
Government Clearances
The food parks will be using the land acquired for both growing as well as processing food,
which will imply agricultural as well as industrial usage. Moreover, the park will have markets,
warehouses, power plants etc, and most of these facilities will not be classified as agricultural
uses. Therefore the company will require clearance from the government form acquisition of
land to construction to commissioning of the parks. Delays in getting any of these clearances will
lead to delay in the completion and non-availability of any of these clearances may indefinitely
stall the park. Therefore such delays and non-availability of clearances can be a threat.
Legal Risk
Unforeseen litigations may cause delay in the implementation or result in cost over runs thereby
affecting the potential return from the Agro parks.
Technical Risk
Each park is envisaged as an integrated system of food processing where the focus is on
integrated operations with maximization of the synergies in keep with locally available
resources. The system will therefore by more complicated than any ordinary business park and as
such the there exists the possibility of encountering technical difficulties during construction
phase. Such problems may delay the implementation and affect the profitability of the park.
Cost Risk
Estimation of the costs to be incurred during the construction phase may not be accurate due the
factors about the park unknown at the time of the projections. If there is an increase in the costs,
it will have a bearing on the profitability of the projects.
Management Risk
Management is the most critical part of successful any project, and timely implementation
without any cost over-runs is dependent primarily on the management. If the management is not
competent or lacks motivation, it will have very negative repercussions on the projects.
Infrastructure Risk
Infrastructure required by the project but not included as part of the project are also important for
connectivity. Delays in creation of these infrastructure facilities may have a negative impact on
the projects’ profitability.
Participant Risk
Agro parks, in order to succeed, will need participation from entrepreneurs setting up units with
the park area. Each park will have to attract sufficient number of participants to achieve
maximum return potential.
57
Operation risk factors
Demand Risk
The success of projects are dependent on sufficient number of investors being will to take up
space in the park for the food production and processing businesses. The inbuilt synergies of the
system and lack of good infrastructure in India make the project very attractive the demand is
unlike to be too low for the operations of the park, however delay in achieving full occupancy
quite possible.
Technical Risk
In a system where there is high degree of integration, technical problems arising in one
component of the park while running the park, will have domino effect on the whole park and
can as such effect the overall profitability.
Cost Risk
The actual costs to be incurred for operating the park may vary from the projections. If there is
an increase in the costs, it will have a bearing on the profitability of the projects.
Management Risk
Given the high level integration in the parks’ businesses, the parks will need to be actively
managed to maintain the efficiency. Incompetence or disinterest will impact profitability.
Miscellaneous risk factors
Force Majeure
There may be unforeseen events that render the agro parks unviable or diminish their
profitability.
Political Risk
The project is in the food and agricultural business domain and each state has the right to
regulate this industry. The regulations pertaining to this project can change in course of the
project and it can have a varied range of impact.
Risk management for physical/social aspects
For physical or social risks for a agropark we consider aspects of water, climate fluctuations or
climate change, natural hazards that will influence the basic conditions for production (also
regional resources) and processing and functioning of the central processing unit as well as the
social risks that can influence the basic network of multi actors, that is needed in building,
implementating and operationalising an agropark This can consist of conflicts between partners
involved (knowledge, education, entrepreneurs, governement, NGO’s and citizens or rural
inhabitants within the agropark or in its direct context. It can consist of the risk of social uproar,
because of the newness of agroparks or because of educational risks (no qualified personel or too
few unskilled workers).
The generic risk management scheme shows in which phases of an emergency which action
should be undertaken. They can be made specific per agropark site.
58
Possible risk mamagement strategies towards risk reduction are:
1. assessment
2. assess priorities
3. plan follow-up,
4. raise awareness,
5. establish and enhance partnerships,
6. highlight vulnerability with other actors,
7. document and share experiences,
8. shape response through advocacy.
Aspects of physical and social risk management for Agroparks
Water and Climate:
For AP there is a present climatological prediction towards a more unpredictable
environment with heavier monsoons with concentrated rainfall, possibilities for flooding as
well as hotter dry spells:
Secured (ground)water availibility: The groundwater as resource has the risk of being
depleted
Restricted avialibility of reservoirs (Tanks) as retention for rainwater or surface water
Required surface water quality for production and processing is unsecure (biocides-pesticdes
and eutrophication pressure)
Energy:
Secured continuous energy supply is essential for wel functioning of Agropark (irt failure of
the CPU system and cooling of intensive production systems (plant as well as animal and
mushrooms)ad cold storage)
Social:
Acceptance of the concept or opposition toward Agroparks
Multiple claims for limited resources (water-soil)
Market competition
Acceptance of type of products produced/processed
59
Acceptance of way of production (Animal welfare)
Education/Human resource/Management:
Restricted availability of trained working force for the operationalisation of the Agropark
Adequate manangement in crop/animal husbandry in surrounding resource areas.
Availibility of unskilled workers in the resource areas
Secured year round supply of products is needed to prevent negative consequences of the
internal agropark chain production, processing and CPU
Secured role of knowlegde input, capacity building and knowledge dissemination
Health:
The large reductions in transportation that can be established by clustering, strongly reduce the
external veterenary and phytosanitary risks. At the same time geographic clustering could result
in severe consequences whenever an outbreak occurs. Therefore adequate technical measures are
needed to prevent internal spreading of diseases. For animal farming, the following measures are
planned:
Divide animal farming in separate units (compartments) with adequate isolation of the units;
Adequate treatment of ventilation air;
Hygienic measures for personnel and feed.
For the intensive plant production systems (including greenhouses and mushroom production),
comparable measures will be taken.
Ecological:
The risk of unbalanced use of land resources (land use of waste lands, natural and semi
natural areas) can influence biodiversity level of agropark or its surroundings as well as the
balance between urbanised and open area.
See waterquality
Organisational:
The Multiactor-multi level approach (KOMBi approach) is essential to have all regional key
players involved and commited in the planning, management and operationalistion of the
Agropark. (For instance guarantee of involvement of water management for total region in which
agropark functions or commitment of the government for balance in perverse subsidiesor
commitment of large entrepreneurs for cold storage and trade)
In agroparks adequate risk management is highly important because of the production chain
integration. Because of the central position of the agropark in the production chain between
agricultural production and distribution centers, the agropark relies on continuity of the other
chain parties. Therefore, a more integrated approach of risk management is required. It is also of
utmost importance to stay the best trading partner: maintain the best price/added quality
proposition. This is well possible because of the scale size and synergy generated in the
agropark.
60
5 Site and context analysis
5.1 Introduction
The site and context analysis has been conducted in four steps:
1. Collection of basic information by MANAGE students for each site (of a long list of
potential sites) and its surroundings: temperature, rainfall, groundwater and surface water
(quantity and quality), soil type, occupation, type of agriculture in the region, price levels
through the year, distribution of value added through the production/processing/trading
chain, access to urban markets, development level of urban markets, and so on
2. For a shortlist of the most promising sites: field visits by a team of experts and collection of
additional (more qualitative and/or more specific) information
3. Analysis, resulting in a final expert judgment of the feasibility of the sites
4. Final selection (by Indu) of sites for further consideration (attracting potential investors,
drafting Master Plans, involving other stakeholders)
All information, both from the MANAGE students and from the expert team field visits has been
summarised in a systematic, uniform way in order to enable a comparison of individual
locations. Thereafter, for each of the sites of the final selection, a 'strategic profile' has been
formulated and a preliminary design of the spatial layout has been drafted. The strategic profile
is based on the results of the analysis. The preliminary design gives a first impression of the mix
of functions that might be suitable for the site, the spatial distribution (zoning) of these functions,
the possible location of the CPU, the internal transportation network with its links to the external
infrastructure, and also some landscaping suggestions.
61
5.2 Site information The following table gives a summary of the collected data of the different sites.
Criteria Amravati Kolar Palmaner Punganuru Nayudupeta Puduvayal
1. Nature of soil 1. Very deep,
moderately
well drained,
fine calcareous
soils
1. Very deep
clayey soils
with surface
crusting
1. Red loams
with gravely
surface
1. Gravely red
calcareous
soils
1. Moderately
deep, moderately
well drained,
black cracking
clay, calcareous
soils
Very deep,
well drained,
cracking clay
soils
2. Suitability for
agriculture
2. Yes 2. Possible 2. Somewhat
possible
2. Needs
development
of land
2. Northern part
of the land is
suitable
2. Yes
3. Suitability for
horticulture
3. Yes 3. Yes. 3. Yes.
Presently there
are mango
orchards in the
land
3. Suitable
with
development
of soil
3. Northern part
of the land is
suitable
3. Yes
4. Ground water
availability/yiel
d
4. Good. 1.5
lakh litres per
day
4. Good. Can
give 1-2 lakh
litres per day
4. Over
exploited and
can give 10-
40,000 litres per
day
4. Ground
water potential
is good & can
give a yield of
up to 1 lakh
litres per day
4. Very good.
Upto 3 mi. litres
per day
4. Semi
critical and
can give an
yield of
100,000 litres
per day
5. Ground water
level
5. Shallow at 8
mts
5. Somewhat
deep at 25-29
mts
5. Shallow at
12-15 metres
5. Somewhat
deep at 37
metres
5. Shallow at 9
mts.
5. Some what
deep at 19
mts.
6. Nearby water
bodies
6. Dastapur
minor
irrigation tank
located at 2 km
6. Narsapura
tank at 2km
distance
6. No nearby
water resources
6. None 6. Swarnamukhi
river- 5 km,
Mamidi Kalva – 1
km
6. None
7. Nearness to
NH
7. On NH-6 7. On NH 4 7. On NH 4 7. 5km from
NH 219
7. 7km to NH-5 7. On NH-5
8. Connectivity
to other places
8. Well
connected
8. Well
connected
8. Well
connected
8. Not so well
connected
8. Well connected 8. Well
connected
9. Rainfall (avg
of 10 years)
9. 870mm 9. 722mm 9. 926mm 9. 804mm 9. 1064mm 9. 1298mm
10. Temperature
(Annual min-
Max)
10. 14-41
degree Celsius
10. 20-30
degree Celsius
10. 13-38
degree Celsius
10. 13- 38
degree Celsius
10. 20- 39 degree
Celsius
10. 15- 40
degree
Celsius
11. Cost of land 11. Rs.
400,000 per
acre
11. Rs. 2-
300,000 per
acre
11. Rs. 80,000-
100,000 per acre
11. Rs. 30-
50,000 per
acres
11. Rs. 3-400,000
per acre
11. Rs.
5,000,000 per
acre
12. Extent of
land
12. 2500 acres 12. 150 acres 12. 500 acres 12. 500 acres 12. 2000 acres 12. 204 acres
13. Abundance
of raw material
(in and around
AFP site)
13. Soy bean,
Sorghum,
Orange, Red
gram
13. Tomato,
Potato, Mango
13. Tomato,
Mango,
Tamarind,
Poultry waste
13. Tamarind,
Tomato
13. Rice, Rice
Husk, Tobacco,
Lemon, Sapota,
Chillies
13. Rice,
groundnut,
sugarcane
62
5.3 Amravati
Location in relation to India and Regional context
Analysis Amravati
Actual Situation
Positive Negative o Large piece of land at one place
o Well connected and NH-6 & State Highway pass
through the site
o Good Infrastructure facilities exist in the land
provided by MIDC
o Easy availability of labor
o Land is relatively cheap @ Rs. 4 lakh per acre
o High ground water potential
o Soil good for horticultural crops
o Water reservoirs in close proximity
o Suitable tropical climate for sheep rearing and
poultry
o Uneven topography
o Land development required
o Water intensive activities on large scale are not
possible
Development Perspective
Positive Negative
o Land available for future expansion
o Better & faster reach through 4 lane NH-6 from
Talegoan to Amravati which is nearing
completion
o Potential for processing units:
1. Orange processing unit
2. Soybean processing- oil, powder, milk
3. Milk based products
4. Meat
o Future for direct exports- Airport close to site and
Cargo hub at Nagpur
o Potential for warehousing and cold chain hub for
Soybean, Gram, Cotton & Orange
o Future procurement of land could be costly as it is
located on highway with lot of upcoming industries
o Non- enterprising attitude of people
63
Strategy o Developing Amaravati as collection and export hub for meat, soy products, fruits
o Use remaining land wihin and ouside the site for greenhouse production
o Thrust on RTC linkages for sustainable supply and development of the region
Preliminary design Amravati: description
Due to the well developed and highly varied agriculture in its surroundings, this site is
excellently placed as a collection centre. And it is also very suitable as an export centre (both for
collected products and for its own production), because of its large size and its position on the
Mumbai-Nagpur-Kolkata railway corridor, the nearby project for a new Nagpur international
airport, and the synergy that may be attained with the adjoining special economic zone (SEZ).
Reversely, the SEZ that has been made ready for occupation but until now didn’t attract much
investment, may get a fresh impulse from the location of an Agropark. As major population
concentrations (even Nagpur at 110 kilometres) are too far away, the site is not suitable for a
consolidation centre.
The site consists of three distinct parts linked by the SEZ. The part to the north of the SEZ (800
acres) may be used chiefly for livestock production, e.g. sheep and goat for export to the whole
of India and to the Middle East. Frozen carcasses are easy to transport by rail to major Indian
cities and to the ports of Mumbai and Kolkata. The part to the south of the SEZ (also 800 acres)
may be used for livestock production as well, but will also offer excellent opportunities for high-
value plant production (e.g. flowers) in relation to the new airport. Another opportunity for this
part is dairy. Finally the smaller part to the west of the SEZ (400 acres) may be used mainly for
residential purposes, both for Agropark workers and workers of the SEZ. At the moment the
railway branch line ends near this part of the site; it would help a more efficient operation, both
of the SEZ and the animal production part of the Agropark, if the line were extended to the
planned location of the major slaughterhouse and the CPU.
64
Preliminary design Amravati: layout
65
5.4 Kolar
Location in relation to India and Regional context
Analysis Kolar
Actual situation
Positive Negative o Excellent positioning of location which is 38 km
to Bangalore, a large metro
o Located on National Highway and connected to
many nearby production centres in Karnataka
o Suitable for production, processing and trade
o Soil can be used for agri/horticultural crops
o Raw material in abundance
o Plain topography of land means less development
cost
o Water intensive activities can be taken up as it is
nearer to water bodies (Narsapura tank)
o Ground water yields are good at up to 1-2 lakh
litres per day
o Drought prone area and erratic monsoons
o Relatively very small piece of land (150 acres) (+100
acres optional)
o Costlier land at Rs. 2-3 lakh per acre
o Relatively polluted area compared to other sites
o Ground water level is relatively deep at 25-29 metres
o Train connectivity at present is nil as the present line is
closed for upgradation to broad-gauge
Development perspective
Positive Negative o Kolar can become processing hub for many
tropical fruits like guava, custard apple as it is
produced in large quantities
o Intensive glass house production of leafy
vegetables and exotics like ice lettuce, spinach
etc., can be very profitable owing to its nearness
to Bangalore
o Future land requirements can be very costly as
virtually no vacant land is existing next to AFP site
o Political scene in the state can delay acquisition of
land
o Erratic monsoons can make ground water availability
difficult
o Fertility of the soil in long-term may be an issue
Strategy o Elaborate Kolar as a consolidation centre for Bangalore
o Put heavy effort on improvement of train connectivity
o Use remaining land wihin and ouside the site for greenhouse production
o Set up RTC’s to improve sustainable development of intensive production to be
processed and transported through Kolar
o Studying possibility of electricity generation from Municipal Solid Waste collected from
Bangalore
66
Preliminary design Kolar: description
This is the second consolidation centre, primarily linked to the metropolitan city of Bangalore
(by the Bangalore-Chennai national highway). Dependent on how much land may be finally
acquired (either 150 acres only, or 250 acres) some additional production might be included
(mostly dairy, also plant – e.g. mushroom production and chickens), as well as typical extension
and education function belonging to the function as a collection centre.
About half the site is occupied by the collection/consolidation functions and the CPU. For a
more detailed account of the consolidation functions see 4.8 Puduvoyal. For less perishable
products, next to Bangalore, also Chennai may serve as a potential market.
Preliminary design Kolar: layout
67
5.5 Palmaner
Location in India and in regional context
Analysis Palmaner
Actual situation
Positive Negative o Excellent positioning of location which is
equidistant from two large metros, Chennai (181
km) and Bangalore (121 km)
o Located on National Highway and connected to
many nearby production centres
o Better climate for sheep rearing as it is more
tropical
o Ground water level is relatively shallow at 12-15
metres
o Relatively less polluted and clean environment
o Can be used for agri/horticultural crops
o Plain topography of land means less development
cost
o Relatively small piece of land (500 acres)
o Costlier land at Rs. 80-100K per acre
o Gravely soil may not be suitable for large scale
agriculture
o Ground water yields are very meagre at up to 10000
litres per day
o No nearby water resources
o No large water intensive activities are possible
Development Perspective
Positive Negative o Procurement for food processing can be very
convenient as many production centres are nearby,
Kuppam, V. Kota, Mulbagal etc.,
o Palmaner can act as warehousing and cold chain
hub for fruits and vegetable requirements of South
India, as it is having better and closer network of
train connectivity to entire south India.
o Chittoor at 50km which can connect to
Hyderabad, Katpadi at 60km connecting entire
Tamil Nadu and Kerala
o Future requirements of land may be costly as it is on
NH
o Erratic monsoons can make ground water availability
difficult
o Fertility of the soil in long-term may be an issue
o Ground water is over exploited in the region and can
pose big problems in future
Strategy o Development as processing park should be elaborated. Potential of nearby agriculture
must first be cleared.
o Hydrologic conditions and land prices could hamper full development of modern land
dependant acgriculture.
68
Strategic profile Palmaner
Site at National Highway (500 acres)
Labour in abundance
Between 2 metros (at Chennai & Bangalore)
Raw material in abundance (Mango, Poultry waste)
Established dairy network with units in the vicinity
Livestock research institute (600 acres)
Agropark Prototype 1: large and complete
Preliminary Design Palmaner: Description
Palmaner is mainly a collection centre with additional on-site production. Due to its relatively
large size (540 acres) and specific features there is also an opportunity for attractive landscaping
and provision of residential functions, though suburban developments are less likely than
recreational housing, due to the distance to major population concentrations.
The front part of the site, along the national highway, is reserved for collection, trading and
primary processing, with some additional space for offices. Behind the collection zone,
production activities (mostly animals) are concentrated, together with the CPU. Some existing
water bodies in the centre are used for landscaping and accommodating education and extension
services, in a campus style green setting. The residential zone is located along a smaller road
branching off from the highway.
Preliminary Design Palmaner: Layout
69
5.6 Punganuru
Location in relation to India and Regional context
Analysis Punganuru
Actual Situation
Positive Negative
o A large piece of land-1000 acres in one
stretch
o Better climate for sheep rearing as it is more
tropical
o Relatively cheap land at Rs. 30-40,000 per
acre
o Ground water potential is good & can give a
yield of up to 1 lakh litres per day
o Relatively less polluted and clean
environment
o Can be used for horticultural crops
o Gravely soil may not be suitable for intensive
agriculture
o Topography is undulating and needs lot of
development
o Not located on NH, a bit interior to commute
o Interior roads to AFP site are not in good
condition and initial land development can be
costly
o Water level is at 37 metres which is deep
o No nearby water resources
Development Perspective
Positive Negative
o Future land requirements can be cheap
comparatively as abundant land is available
o Can act as nearest point for processing citrus
(Gudur), Papaya (Kodur)
o Good cold storage facilities available
o Tamarind is available in plenty for processing
and export
o Tropical climate can be leveraged to develop
sheep rearing centre and can act as hub of
meat exports
o Erratic monsoons can make ground water
availability difficult
o Fertility of the soil in long-term may be an issue
o Relatively less or nil fruits and vegetables
production in the surrounding area
Strategy o Development as production and processing park should be elaborated.
o Potential of nearby agriculture must first be cleared.
o Hydrologic conditions could hamper full development of modern land dependant
acgriculture.
Preliminary Design Punganuru: description
Punganuru is also a collection centre that also serves as a satellite to Palmaner. The site is
located 5-6 km from the town Punganuru which is on NH-219. The land is undulating and needs
extensive development before it can be used for agro park. It has a very tropical climate that can
be very suitable for sheep rearing and meat processing and exports. Undulating land topography
can be used to develop pastures for grazing. Tamarind is a major raw material that is available in
abundance which is suitable for further processing to powder and other products.
Preliminary Design Punganuru: layout
Not available as of now.
71
5.7 Nayadupeta
Location in relation to India and Regional context
Analysis Nayudupeta
Actual Situation
Positive Negative
o A large piece of land at a stretch- 2000 acres
in one place
o Govt is selling the land hence basic
infrastructure can be set up easily
o Being situated in AP Industrial Park, several
other units are in the offing
o Semi-skilled labour is available whom are
trained by APIIC
o Ground water potential is good & can give a
yield of up to 5 lakh litres per day
o Situated in the river basin of Swarnamukhi
o Relatively less polluted and clean
environment
o Plain topography of land means less
development costs
o AP’s 80% of acid lime and sweet orange
production happens in Gudur which is just
20km from the site
o Two to three major soil types are present. Red
clays, calcareous soils may not be suitable for
intensive agriculture
o Not located on National Highway
o Apart from acid lime and mango, there are no
other major fruits in the immediate vicinity o Although an important railroad track is nearby, it
is not possible to connect to the main railway
line immediately.
Development Perspective
Positive Negative
o Can be scaled upto 3000 acres
o Present road to AFP site can be strengthened
to support heavy traffic
o Can act as point for processing citrus (Gudur),
Papaya (Kodur)
o Nellore district does not receive much rainfall in
SW monsoon but NW monsoon which starts
from October. This limits the type of crops that
can be produced.
o Certain parts of the land (Palachchuru) are
72
o Bio waste like rice husk available aplenty
o Acid lime and sweet orange is available in
plenty for processing and export
o Since the land is given by govt, certain tax
benefits can be sought
o Infrastructure development like roads, water
may not be an issue as they would be handled
by govt.
o Krishnapatnam seaport about 45km from the
site is being developed
gently slopping and hence the surface soil
crusting is common during rains
o Some parts of the land are highly saline and
marshy in nature. These lands may not be
suitable for infrastructure development
Preliminary Design Nayudupeta: description
Given its large size (2000 acres) in combination with relatively productive surroundings, but
rather much distance to major population concentration, Naydupeta is another example of a
collection centre with ample additional opportunities for on-site production. As such it comes
closest to Amravati, but there is also similarity with Medak and Palmaner.
Along the national highway and the central access road the major collection, trading and
processing functions are concentrated. Dependent on the viability of building a railway link to
the Eastern India (Chennai-Kolkata) trunk line the site may also serve as an export centre.
Production facilities in the northwestern part of the site are assigned to animal husbandry, around
a central slaughterhouse. Most of the southern part of the site is reserved for dairy production,
around a large-scale milk processing plant that could also handle substantial quantities of milk
collected from farms in the surroundings. Finally the northeastern part of the site is dedicated to
plant production.
Existing waterbodies and a steep hillock in the centre of the site are used for landscaping, with
residential terraces running down from the hill sides to the water, and supportive office and
extension, education, R&D and demo functions extending further along the river bank.
The viability of animal husbandry on a scale as proposed by this design is highly dependent on
the opportunity to source raw materials for animal feed in the surroundings. This may call for a
shift in crops, e.g. more soy beans, the waste of which that remains after extracting oil for human
consumption, is an excellent base for fodder.
Strategy
o Before acquisition of land and elaborating a masterplan, more information on
available feed and energy crops must be assembled and clarity on railway
connection must be obtained.
o Nayudupeta can be developed as a large scale collection-, production- and
processing park.
o Primary focus on intensive livestock farming and freshwater production.
o Taylor made development of greenhouse production
73
Preliminary Design Nayadupeta: layout
74
5.8 Puduvoyal
Location in relation to India and Regional context
Analysis Puduvoyal
Actual Situation
Positive Negative
o Just about 34km from the heart of a metro,
Chennai
o Located spot on NH and connected directly to
the metro market.
o Connected easily to Ennore seaport (new) and
Chennai seaport
o Relatively small piece of land (150 acres)
o Very expensive land at Rs. 50-60 lakh. per acre
o Present roads with in Chennai city are in very
bad shape which can hinder the logistic
operations
o APMC act does not permit third party handling
of agriculture produce Development Perspective
Positive Negative
o It can act as good consolidation centre for
Naidupeta and Palmaner as both of them are
located nearby
o Ennore which is being developed as new
seaport is just 20km from the site.
o Chennai is well connected by road to all
major markets like Bangalore, Vijayawada,
Tirupati, Vishakapatnam
o The site location can be developed for sports
activity centres like Go-Karting
o Future requirements of land may be costly as it
is on NH
o Present location does not hold any promising
potential for recreation facilities like movie
theatres, restaurants as there are no residential
areas in the vicinity.
o Interior roads leading to this location are very
bad and can pose hurdle for the intending
customers of recreation.
o There is no major fruits and vegetable
production in the catchment area
o Govt policies can be tricky as the state at present
does not permit third party markets for
agriculture produce. Strategy o Need to get clearance from TN govt on APMC act
o To study possibility of set up an electricity generation plant from Municipal Solid
Waste collected from Chennai
75
Preliminary Design Puduvoyal: description
This is a typical consolidation centre that may serve the Chennai market. To give a better idea of
how such a typical consolidation centre may exactly work, in the preliminary design for this site
more detail is shown than in the designs for the other sites. However, these details apply to Kolar
in a similar way. The Dutch example of the ‘Zon Freshpark’ near Venlo has been used as a
reference.
Trade, storage and processing functions in a consolidation centre are more differentiated and
specialized, with more varied support functions, than in a collection or export centre. Within the
broad category of trade, a wholesale market (‘cash and carry’) is proposed, an auction for
collective use, and modules for individual traders. The auction is linked to common cold storage
facilities. Processing is both aiming at primary (e.g. initial cooling and packing) and secondary
activities (e.g. cleaning and cutting and combining with other products). Processing needs
support from a unit dealing with the production, cleaning and reuse of packing material. The
CPU specializes in upgrading waste of the processing activities into reusable inputs, next to its
usual function of turning non-reusable waste into energy.
Close to the entrance of the site hospitality and office functions are concentrated, while a service
point for truckers is located more in the background.
76
Preliminary Design Puduvoyal: layout
77
5.9 IFFCO Nellore
Location in relation to India and Regional context
Analysis IFFCO Nellore
Actual Situation
Positive Negative
o o
Development Perspective
Positive Negative
o o
Strategy o
Preliminary Design IFFCO Nellore: description
78
Preliminary Design IFFCO Nellore: Layout
