Agri Business

FDI in food trade sans infra creation ‘rider’ irks Food Processing Ministry

| Updated on: Jun 24, 2016

‘Astonished’ RSS-backed farmers’ body seeks immediate roll-back

The Centre’s nod for 100 per cent foreign direct investment (FDI) in trading of food products with “no riders”, has not only raised the hackles of the Food Processing Ministry, which has been pushing for 15 per cent mandatory investment in creation of back-end infrastructure to reduce wastage and create jobs, but has also irked farmers organisations, such as RSS-backed Bharatiya Kisan Sangh (BKS), who see no benefit for growers.

The Food Processing Ministry is cut up with the Commerce Ministry for notifying the policy for 100 per cent FDI under government approval route for trading, including through e-commerce. On Friday, it said applications for FDI in food products retail trading would be processed in the DIPP before being considered by the government for approval.

However, Food Processing Minister Harsimrat Kaur Badal is said to be unhappy with the “no rider” stance of the Commerce Ministry even after inter-Ministerial deliberations on the issue, as she feels that mandatory investment by foreign companies in back-end infrastructure, such as cold chains, would not only help reduce wastage, but also generate jobs, said sources.

The Minister also feels that this will help the Centre achieve the target of doubling farm income by 2020, as farmers will get better rates for their produce.

But, officials in the Department of Industrial Policy & Promotion (DIPP) say that the revised FDI policy has been cleared by the Prime Minister’s Office.

“The FDI policy for food has been announced exactly in keeping with the Budget announcement made by the Finance Minister,” an official said, adding that there is scope for introducing conditions on infrastructure investment being pushed by the Food Processing Ministry later, if there is a consensus on the matter, the official added.

Broadly, however, there is a feeling in the DIPP and the Finance Ministry that “riders” can be seen as restrictive by foreign food firms at a time when the Centre wants FDI to flow in full force.

Farmers angry

Farmers’ organisations, however, are an angry lot and expect rural distress to aggravate with such a policy.

“FDI will not generate jobs. Instead, it will reduce farmers to being urban workers. The Centre needs to generate rural jobs to stop migration,” Badri Narayan Choudhary, National Secretary, BKS, told BusinessLine . Calling for an immediate roll-back, he said the NDA government’s decision was “astonishing”, as when in Opposition they had vehemently opposed the policy.

Shrugging off the prospects of higher income following better prices for produce, he said: “Farmers are now getting the lowest cost for their produce — from middlemen as well Indian companies. You expect foreign firms to pay well? It all depends on demand and supply.”

Rakesh Tikait, National Spokesperson of Bharatiya Kisan Union, said: “100 per cent FDI offers no encouragement to Indian farmers, especially small and marginal ones. The net result will be that 100 per cent of our produce will go outside the country.”

(with inputs from Amiti Sen)

Published on January 20, 2018

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