Bangalore: Even while the Ministry of Commerce is planning to revamp the Agri Export Zones (AEZ), the State Government's AEZ policy has gone to seed, particularly with regard to floriculture.

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

Nodal agency

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

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

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

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

Closure

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

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

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

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

Irregular power supply

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

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

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

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

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