Want 100% FDI in multi-brand retail in food: Harsimrat Kaur-Badal

Food Processing Minister pushes for national e-platform bypassing mandis for farmers, food producers

Food Processing Minister Harmsimrat Kaur Badal on Tuesday said she had written to the Prime Minister to allow foreign direct investment (FDI) in multi-brand retail for food products that are grown and processed in India.

“The idea is to help the farming community here, and we are expecting the government to consider this, given that Make in India is his (PM Narendra Modi’s) programme,” she said.

The move also follows the Prime Minister’s call to food and beverage manufacturers, particularly beverage makers, to at least 2 per cent of locally produced juice in their product, she said.  Coca-Cola and Manpasand have already launched products that follow this recommendation. On Friday, Coca-Cola launched a version of its popular Fanta brand that contains 10 per cent juice content.

Kaur-Badal also said the ministry was putting in place a national electronic agricultural marketplace that would allow farmers to sell their produce directly to anyone in the country, without having to go through the agricultural marketplaces, or mandis. While private companies such as ITC have in the past experimented with a similar model, called e-chaupal, the government had never taken such a step.  There are about 2,400 such mandis across the country that effectively control pricing and supply.

“This is the first time that any government has taken such an initiative,” the minister claimed.

However, cooperation of the states will be key, she added, since most APMCs are under the states’ jurisdiction. So far, Kaur-Badal said, 23 states have given in-principle approval for setting up a national agricultural market for farmers and food producers.
 

         BUDGET 2016 WISHLIST

• 100% FDI for multi-brand retail in food processinG

• 10-year tax holiday for 42 food parks.  

• Interest subvention for units in the food parks.

• Asking for GST at the lowest level for the food processing sector

The ministry is also working on bringing down wastage in food processing and agricultural sector, which remains very high in India. “The total value of wastage in agro and food processing is Rs 92,000 crore, we will bring that down,” she said at the Make in India event.

The Food Processing Minister said that out of 42 mega food parks, 5 have been already made operational in the past 18 months, while another 3 will open by the end of the year. Two such parks had been opened by the previous government

The remaining 32 parks will become operational over the next 30 months, she said

“We hope to take the share of food processing in GDP from 2 per cent to 10 per cent in the next few years using a combination of encouraging local manufacturing through food parks, providing fiscal benefits and incentives and improving the consumption of processed food,” she said. “That’s my agenda.”

The minister will also meet with banks to urge them to lower lending rates for agriculture and food processing ventures, sources said. Currently, banks typically lend at 10 per cent or more rates, while NABARD, which has a corpus of Rs 2,000 crore, lends at about 9.5 per cent. Kaur-Badal, these sources said, wants banks to push more lending to food processing units as part of their priority sector lending.