India for 100% FDI in food retail, but with riders

Union Food Processing Industries Minister Harsimrat Kaur Badal on Thursday said the government favoured 100-per cent foreign direct investment in multi-brand retailing of processed food items, but the multinational corporations will have to divert 15 per cent funds for building infrastructure at the "farm gate level".

She said the multinational companies in the sector can play a "catalytic role" in transforming the farm economy in the country.

The commerce ministry is "framing guidelines" for the proposed FDI, on which a decision has already been agreed upon in principle by the union cabinet, she told the media in New Delhi while listing her ministry's achievements in the last two years.

"We had suggested the FDI route. My ministry believes the entry of multinational companies will play a catalytic role in transforming rural and farm economy if they enter the retail market," the minister said.

"We do not want a situation where the MNCs open retail outlets but procure things from regular 'mandis' (agri markets). This will hurt the farmers. Hence, my ministry has proposed for 15 per cent funds to be invested in infrastructure development," she said.

Badal said sustained efforts and crucial policy decisions have helped the government bring down wastage in agricultural produce by about 10 per cent from a whopping Rs92,000 crore loss a year.

"The government is committed to zero wastage of agricultural and horticultural products," she said and pointed out that effective food processing policies have helped countries like the Philippines.

The minister said an investment of Rs800 crore by the National Democratic Alliance government had ensured setting up of six mega food parks and thus bringing down food wastage.

She said the central government will soon give nod for smaller food parks and also announce the setting up of 100 cold chain projects.

The minister said the government will create small and medium enterprises in the food processing sector all over the country. A new scheme 'SAMPADA' will focus on seamless development of agri processing clusters to give the endeavour a further push.

A blueprint has been prepared to start 250 such clusters at an estimated total expenditure of Rs5,000 crore.

Badal said one of the major steps in the last two years has been the plan for 37 mega food parks and 134 cold chain projects. Under the mega food park scheme, which began in 2008, eight such parks have been operationalised, including Ramdev's Patanjali.

"Six of the parks came up during our government's term," she said.

The minister also said the ministry will soon launch a mobile app to provide one-stop information to farmers/entrepreneurs to provide necessary support for setting up food processing units.

Badal also launched a new online portal for bringing more transparency in the development and maintenance of food parks.

The new portal will allow online filing of claims for the release of grants for various projects.