FDI will benefit consumers, farmers: PM

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.

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 percent 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.