Investors yet to bite Keralas Rs 22,500-crore food pie

Thiruvananthapuram | Updated: Nov 21 2005, 06:28am hrs
When the Centre announced 20 AEZs (Agricultural Exports Zones) last year, Kerala notched up nine. Notifications of all nine are now ready. The only missing link is the crucial entrepreneur.

Following President Kalams prescriptions, the state has, in its draft Vision Kerala 2010 also scripted other AEZs in medicinal plants, floriculture and spices. And with an investment of Rs 29 crore, the proposed nine AEZs are expected to add Rs 22,500 crore to the state domestic product.

Kinfra, Keralas premier infrastructure building outfit, is working on three parkstwo food-processing parks and one BT park. While its Kakkanchery food park remains a modest SSI preserve, the Kochi BT park has ambitions for forward integration of R&D in molecules to drug level in Ayurvedic herbs. Fruit and horticultural crops wing of French firm CIRAD has been in partnership talks with Kinfra for these parks.

"The government is considering a dedicated venture capital fund for agro-processing," informs a state planning board official. With the local food business giants keeping away, the state is eyeing NRI money, which has been, of late, steering clear of Kerala banks.

Nowhere has Keralas failure to get tech-savvy big investors, proved as critical as in agriculture. Take the pineapple trade from Vazhakkulam village in central Kerala, for instance. When Australia-based Tropicana, through its Indian arm, offered Kerala pineapple a long-term contract in sync with the Punjab orange model, farmers were unable to meet the stringent supply terms. The outcome It is the Vazakkulam pineapple prices that squeeze, when the truckers from Mumbai or Delhi market go to strike.

A budding success story, however, is that of vegetable exports. Ironically, the state that buys about Rs 1,000-crore worth vegetables every year from neighbouring states for domestic consumption, exports a Rs 200 crore air cargo of vegetables from its own farms. This is partly because Kerala has three active airports and a ready market for traditional vegetables like gherkhins, bittergourd and colocasia among the NRI diaspora in West Asia. The state agency, Vegetable and Fruits Promotion Council, exported 50 tonne this year.

"Vegetable exports, however, have been growing mainly out of private enterprise, not on state initiative," insists Dil Koshi, secretary, Perishable Products Exporters Association. What has baffled planners in the state is that even when Kerala accounts for one-fifth of Indias food exports (cashew, spices, seafood), there has not been corresponding growth of investment in food processing and value addition technologies. And whenever there is spare capacity, investors have been shying from utilising it.

Alapuzha and Kochi are home to 75% of seafood units certified by EU, equipped with high quality seafood processing gear. But the capacity utilisation is only 35-40%.

As a small linear state, which sources most of its food commodities from the north, Kerala has been an indispensable market mecca for items from Nagpur oranges to Andhra chillies. But not the reverse.

Historically, the state had no option but to link its own food produce to the overseas markets. In revving up this supply engine with value-addition too, the states AEZ drive seems to draw better business vibes with NRI enterprise, rather than Indian corporates.