Agri Export Zones (AEZs), despite putting up a good performance, failed to top decision makers? priority list. The scheme for setting up AEZs was conceived in 2001 and today they are 60 in numers, spred across 20 states. Despite low investments and inadequate infrastructure, AEZs have received an exports earning of over Rs 60,000 million in the last five years.

And in the last six years, not much investment has flowed in. This is despite promises made to agriculturists and traders. Both central and state governments have not been playing a proactive role to bring in investment, let alone encouraging private sector to invest.

As per initial criteria, investments by the Centre, states and the private sector has to be in the ratio of 1:1:2. Accordingly, the total investment for 60 approved special economic zones (SEZs) was estimated at Rs 17,179.50 million. Against this, the total flow of investment to date is only 8,111.80 million.

Despite low investments, AEZs could achieve about 50% of the export target (Rs 118, 214.70 million) over a period of five years. ?There is a lot of under-reporting by the state governments about the movement of produces from AEZs for exports. We have received a exports figure from AEZs of only Rs 51,852.30 million in five years. This should exceed Rs 60,000 million,? said a senior commerce ministry official.

Another reason for exports performance being below target is that all AEZs were not set up in 2001. Many of them were set up much later. And majority of the exporters are of the similar view. They believe that majority of the investments done so far are by the private sector. The investment could have been much higher had the central and state governments developed better infrastructure, encouraged investment and put in their share of the investment.

Executive director of the government for international trade in agriculture and agro-based industries (CITA), Vijay Sardana said: ?The investments could have been much higher had there been a transparent system for fixing accountability. In AEZs multiple agencies belonging both the Central and state governments are involved. Unlike SEZs, there is no single promoter for an AEZ. The Agriculture and Processed Food Export Development Authority (APEDA) is designated as the nodal agency without much effective authority for implementation.?

According to commerce ministry sources, the APEDA had recently asked for Rs 2,500 million to support AEZs under the government?s scheme for assistance to states for infrastructural development for exports (ASIDE). But the ministry agreed to render only Rs 500 million to AEZs under ASIDE scheme.

Unlike the SEZs, the AEZs do not have specified physical boundary. They are confined to specific regions in states, known for growing specific crops. The AEZs are designed for bringing integrated development of larger area including boosting income prospects.

So far, the AEZs have been set up for crops like pineapples, litchi, potatoes, mangoes, vegetables, Darjeeling tea, gherkins, rose onions, flowers, vanilla, Basmati rice, medicinal and aromatic plants, grapes and grapevines, kesar mangoes, onions, pomegranate, banana, oranges, mango pulp, chilli, apples, walnut, garlic, seed spices, wheat, lentils and gram, cut flowers, cashewnuts, honey, sesame seeds, cherry pepper, ginger, coriander and cumin.

Farmer leader and executive chairman of Bharat Krishak Samaj, Krishan Bir Chaudhary said, ?Unlike SEZs, the AEZs do not enjoy any special fiscal sops and hence there is no revenue loss for the government. The government has already admitted that the revenue loss due to SEZs would be over Rs 10,00,000 million by 2009-10. SEZs are being set up on prime farmlands at the expense of food security. Out of the acquired land for SEZs, only 35% is for real business and the rest is for real estate. AEZs are much better for farmers.?

According to Chaudhary, AEZs do not displace farmers, rather are aimed at strengthening their income and livelihood. He alleged, ?If the government is interested in integrated rural development, it should support AEZs and scrap the SEZ scheme. If SEZs are to set up it should be done on 552,692.26 sq km of identified wastelands in the country.?