Food processing minister wants more foreign funds in retailFebruary 19th, 2009 - 9:41 pm ICT by IANS
New Delhi, Feb 19 (IANS) Increased foreign investment in the retail sector would help food processing industry, according to Minister of State for Food Processing Industries Subodh Kant Sahai.
“Retail is one thing that is not going to harm your domestic market. Retail is what is going to give you passage to the world market because this sector is not limited to the domestic consumer. They will go for the world consumer,” Sahai told reporters after launching a new National Meat and Poultry Processing Board.
As of now, India has a cap of 49 percent on foreign investment in single-brand retail while multi-brand retail is not allowed.
Sahai also said the food processing sector would be the driving force of India’s economy in these tough times.
“From a growth rate of 6.7 percent when I took over as minister, the sector is growing at 13.12 percent today,” Sahai told reporters.
He said with the development of the food processing sector, farmers will also gain through post-harvest technology and distribution of free seeds, and contract farming driven by market demand would be the norm.
Stating that foreign investment of around Rs.1,600 crore (Rs.16 billion) has come into the sector, Sahai said: “Though foreign investors are coming, they want good backward and forward linkages which we are lacking. However, we hope to overcome this problem with the mega food park scheme which will take food from the farm gate to retail (outlets).”
Under the 11th Five-Year Plan, 30 mega food parks are being planned in different parts of the country. In the first phase, 10 such parks are expected to come up in the next two years.
These parks, to be located close to agricultural lands, will provide common infrastructure to different stakeholders and help reduce wastage of agriculture produce by providing a proper supply chain management that will carry processed food from the farm to the market.
The minister also said access to the world market would go a long way in the uplift of Indian farmers.
“In the US, hardly 4 percent of the population is engaged in agriculture whereas in Europe, it is 7 percent. In India, 70 percent of the population is engaged in agriculture. So accessing the world market will help in the employment generation among this 70 percent.”
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