The Central government is ready to open the agri-business sector for foreign direct investment. For this, the ministry of food processing industries has started working with the commerce ministry to attract FDI in this sector. Both ministries have made a plan to build up mega food parks in the country for food retailing and promoting. The idea for building the food parks has come from the success story of software technology parks of India.
The proposal has been prepared and sent to the cabinet for the approval. In this proposal, the government would allow organised retailers in agri-business to bring in investment through FDI in food retailing. The processing units need money and better technology to make the product of world class. With this development, the retailers would be directly connected with farmers in a farm-to-franchise concept. FDI in this area would be helpful to build better infrastructure such as chains of cold storages and milk chilling plants.
Last year, the Global consultants Dun & Bradstreet had prepared a survey report and said that because of lacking in better processing technology and cold storage, India wastes farm products, including dairy items worth of almost $13 billion per year.
To curb the problem, the proposal has talked about the contract farming to create clusters for horticulture, meat, dairy and other products in accordance with the geo-climatic conditions of different regions.
The clusters would lead the mega food parks, sometimes called as special economic zones for the processing industry, in public-private partnership. The ministry has also planned to set up a purpose vehicle including farmers, processors and retailers who will establish and run these food parks.
Over the land acquisition matter the proposal says that interests of the farmers would be a high priority. A venture capital fund would be also created to provide funds for the processing units to invent some innovative manufacturing methods.