BHUBANESWAR: The ambitious plan of the Odisha government to develop at least one cold storage of 5,000 tonne capacity in each of the 58 sub-divisions in the state under the Financial Assistance to Cold Storages (FACS) scheme has not enthused prospective investors due to lack of clarity on critical aspects.
The Agricultural Promotion and Investment Corporation of Odisha Limited (APICOL), the nodal agency for implementation of the scheme, has received only 14 proposals after FACS rollout in January this year.
The agency has so far given go-ahead approval to five proposals, but nothing has moved at the ground level.
The FACS scheme, considered to be one of the most liberalised policy of the state government, has failed to evoke desired response from investors despite offering 50 to 60 per cent capital investment subsidies up to Rs 6.5 crore, interest reimbursement, 50 per cent electricity tariff subsidy, and working capital support. The government has made a financial outlay of Rs 252 crore under the scheme.
A cold storage operator told TNIE that the core bottleneck is the absence of assured and adequate production linkages.
“Financial incentives, infrastructure support or policy provisions can only yield results when there is a steady and organised flow of produce into the storage facilities. Most of the cold storages are currently functioning below capacity due to insufficient aggregation of storable commodities within their operating radius. Without a guaranteed base of production, cold storages cannot maintain viable occupancy levels, leading to negative returns, rising operational costs and eventual closure in several cases,” the operator said.
At the same time, first-generation entrepreneurs entering this sector lack exposure to the operational, technical and financial intricacies involved in establishing and running a cold storage unit. They are uncertain about critical aspects such as project design, DPR preparation, cost component flexibility, land valuation norms and other construction parameters. Many promoters do not venture to proceed with their investment decisions due to lack of clarity and the executing agency has failed to address these issues, sources said.
The reluctance of the Agriculture department to adopt the cluster-based approach after failure of the Agriculture Production Cluster (APC) scheme is another reason for not attracting investors as they are not sure of assured linkage of commodities for storage, admitted an officer of the horticulture department.