Retail FDI supported by farmers, will benefit them and consumers: Manmohan Singh

Dec 08 2012, 15:49 IST
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Manmohan Singh says FDI in retail will benefit farmers and consumers and help introduce new technologies in agri marketing. Manmohan Singh says FDI in retail will benefit farmers and consumers and help introduce new technologies in agri marketing.
SummaryGovt has won Parliament's approval to its controversial decision to allow FDI in multi-brand retail.

A day after winning Parliament's approval for allowing FDI in retail, Prime Minister Manmohan Singh today voiced confidence that it will benefit farmers and consumers and introduce new technology and investment in marketing agricultural produce.

He also said that the decision to allow FDI in retail was "strongly supported by farmer organisations in Punjab."

"It (FDI) will introduce new technology and investment in marketing agricultural produce.

India must take full advantage of modern technology and operational and management experience of big supply chains in the food retail business to make this happen," Singh said speaking as a chief guest at Punjab Agricultural University's golden jubilee function here.

"I am confident that it will benefit the farmers, and the consumers and our country," the Prime Minister said.

The government had yesterday won the approval of Parliament to its controversial decision of allowing FDI in multi-brand retail with a motion against it being defeated convincingly in Rajya Sabha, as BSP voted in favour of UPA.

123 members had voted against the motion while 109 voted in favour after a debate during which the Opposition had attacked the proposal to allow 51 per cent FDI in multi-brand retail, while the government had strongly justified it saying it was in the best interest of the country.

Speaking at the University, Singh asked leading farm varsities like PAU to gear up to meet the existing and future challenges in the agriculture sector.

The Prime Minister touched on a range of issues facing the country's agriculture from over-exploitation of ground water to crop diversification and how PAU could help India tackle the challenges of future.

He noted that some of the crops are perishable and therefore pose special post-harvest handling and marketing problems which affect farm incomes.

"Agricultural supply chains in India are highly fragmented and inefficient, leading to losses to both producers and consumers.

Consumers pay high prices but the benefit of these high prices do not reach the producers.

The development of efficient and vertically integrated supply chains in agriculture can take care of these issues," he said.

The Prime Minister said that the scope for building such supply chains is especially large in more advanced agricultural states and Punjab can be a torch bearer in this shift.

"Investment in back-end infrastructure has the potential of minimising wastage, especially of perishable fresh foods and vegetables, and increasing the income of farmers. Punjab should take the lead in encouraging best practices in crop management and improving food safety and hygiene. Investment in marketing linkages would be greatly facilitated by supporting changes in the Agricultural Produce Marketing Committee Act which would allow private markets to develop," he pointed out.

The Prime Minister laid a lot of emphasis on the role of agricultural research, pointing out that it has "special significance for the country as a whole and for Punjab in particular."

"We aim to increase our expenditure on agriculture research to 1 per cent of agricultural GDP in the 12th Plan from the level of 0.65 per cent in the 11th Plan," he said.

He also said the 12th Plan has targeted for the country as a whole an average of 8.

2 percent growth in GDP and 4 percent growth in agriculture. "I hope Punjab will try to do better on both counts," he said.

Singh also laid stress on modern biotechnology, which enables identification and implantation of genes imparting resistance and tolerance to moisture and temperature extremes.

Biotechnology "can play a very important role in future," he said.

Speaking on the issue of BT technology, he said, "Safety concerns are often raised in the context of Bt technology, and these need to be addressed in a scientifically defensible manner.

"However, I am confident that all legitimate health security concerns can be met and we are working to put in place an improved regulatory framework that will allow our research scientists to push ahead in their endeavour to develop technologies that can deliver positive results for farmers," he said.

The Prime Minister asked PAU to gear up to help Punjab's agriculture sector meet the challenges of the future, and help the state scale new heights.

"The future is rarely a linear extrapolation of the past.

Circumstances change and new challenges arise.

It is, therefore, important to identify challenges of the future and start working now to meet them. It is evident that several stress points have emerged in Punjab's agriculture which need to be addressed," he said.

Singh said the sustainability of water use in agriculture has emerged as a major problem in Punjab. "Exploitation of ground water far exceeds the rate of recharge and is leading to steady decline in the water table. This is clearly not sustainable.

Similar problems exist in other parts of the country, but they are most severe in Punjab, where 80 per cent of the development blocks are now categorised as over-exploited.

"By addressing this problem, Punjab will once again prove to be a leader in this area, and its lead will point the way for several other states," he said.

Seeking a break from the traditional cropping pattern, Singh said the challenge is how to maximise farm income while adopting a more sustainable strategy for water use.

"This definitely calls for a change in the rice-wheat cropping system, which at present covers more than 80 percent of cropped area.

It is a profitable cropping cycle for the farmer only because the cost of over exploiting ground water is not part of private profitability calculations," he said.

Stressing upon the need for crop diversification, the Prime Minister said Punjab cannot and should not continue over-exploiting its ground water to support rice cultivation. Diversification from rice is, therefore, essential.

"Fortunately, a gradual phasing out will not affect the overall food security of the country because there are good prospects of rice production in the eastern and central parts of our country increasing and it can be made to increase more rapidly in the future.

The gap between potential and actual productivity at the farm level for rice is over 100 per cent in Assam, Bihar, Chhattisgarh and Uttar Pradesh," he said.

Singh said the National Food Security Mission that the Central Government launched in 2007 aimed at increasing production of wheat, rice and pulses by providing better access to high quality seeds and other inputs at subsidised prices.

"These efforts are yielding positive results. Increasingly therefore, the burden of foodgrain production can be borne by other states," he pointed out.

"Punjab's agricultural strategy must evolve a workable diversification plan which causes the least economic hardship to farmers and provides them with alternative crops which can yield a high enough income," he said.

The Prime Minister said alternative crops that can be competitive with respect to paddy include maize, cotton, sugarcane, pulses, oilseeds, fruits and vegetables.

"Agricultural research can play a major role in improving productivity of these crops to enhance their profitability for the farmer," he said, adding PAU must look to finding research solutions for dealing with new marketing challenges.

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