FDI in multibrand retail will boost farm sector: report

New Delhi: Allowing FDI in multibrand retail will encourage significant investments in back-end supply chain of farm commodities, said an Assocham-Yes Bank report.

Suggesting the roadmap for second Green Revolution, the the report said the government needed to push various agricultural reforms, including streamlining of norms to promote private sector investments in agriculture.[caption id=“attachment_374938” align=“alignleft” width=“380”]  Foreign money. Reuters[/caption]

“Allowing foreign direct investment (FDI) in multi-brand retail will encourage significant investments in back-end supply chain,” said the report released at an event jointly organised by Assocham and Yes Bank in New Delhi.

To meet the rising demand of food products, there is urgent need to enhance agricultural productivity and develop strong forward and backward linkages along the entire agri-value chain, it said.

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“For this second green revolution, the key mantra would be public private partnerships (PPP) across almost all the stages of the agri-value which would in turn also need appropriate institutional and policy support,” the report said.

Noting that liberalisation of retail trade may further encourage entry of corporates in many ways, it said, “Promotion of investment into supply chain will provide incentives to enterprises investing in agri-supply chain.”

At present, the government has suspended the implementation of the decision to allow FDI in the multi-brand sector following strong protests from several state governments and UPA’s key ally, Trinamool Congress.

According to the report, “The complexity of the agri supply chain and still largely unorganised Indian agri industry provides ample scope for the private players to come in PPP mode with the government and bring a turnaround.”

The government can actually look into the PPP mode to build up agriculture infrastructure, especially water, land development, creating single domestic market for agriculture produce, storage, transportation, processing and marketing of food items via retail chain, it suggested.

In actual terms, public investment forms about 20 percent of the total investment in agriculture and 80 percent comes from private players, it added.

PTI