Union Budget proposes hundred per cent FDI in marketing of food products

MARCH 1, 2016 BY FSH TEAM LEAVE A COMMENT

Union Budget proposes hundred per cent FDI in marketing of food products

At the time of the budget all industries look forward to see what is in store for them as that gives direction to their future plans. The proposal for the food sector that has been made by the Finance Minister in the Union Budget 16 -17 is that hundred per cent FDI be allowed in the marketing of food products.  The hundred per cent FDI will be allowed in marketing of food products produced and manufactured in India.

Presently there is no clarity on what this could mean and if relates to foreign chains being allowed to set up food stores in India. Retail stores operating in India like Wal-Mart are allowed only 51 per cent FDI presently.  There is also some talk that this could mean opening retail for foreign retailers for fresh produce. The use of the word ‘marketing’ is causing a little confusion and no one is presently sure about what kind of marketing this will entail; retail marketing or only wholesale marketing. If it pertains to retail marketing then this could mean multi-brand retail marketing, beginning with the food sector.

According to the Finance Minister, Arun Jaitley, this move will benefit farmers as well as the food processing industry. Foreign players who are planning to produce foods themselves in India will be able to test the market to see how it goes. Some industry experts feel that ‘marketing’ probably is linked to retailing of products produced in India. This announcement  could have a link with food processing industry as Harsimrat Kaur Badal, Union Food Processing Minister, has been rooting for hundred per cent FDI in retailing of processed food items that are sourced from within the country.

Some amount of clarity has come from the Finance Minister himself when speaking on Doordarshan. Here he has said that hundred per cent FDI means that foreign companies will buy produce from farmers in India, process it and then sell the products in the domestic or international market. Another important move that is likely to help farmers is the Krishi Kalyan cess which will be set up by increasing the service tax by another 0.5 per cent. This service tax will be deducted effective from 1 June, 2016 and the cess will be used for financing initiatives for improvement in agriculture and for uplifting farmers.

The government hopes that this hundred per cent FDI proposal will help to address the problems of farmers as well as the food processing industry. The Finance Minister sees this as a move that will reduce waste of vegetables and fruits grown by farmers and will fetch them the right price and a market for their produce. This will also impact the food processing industry as trade is likely to be more efficient especially for food produced and manufactured in India.

Union Budget makes announcement to encourage organic farming

FEBRUARY 29, 2016 BY FSH TEAM 1 COMMENT

Union Budget makes announcements to encourage organic farming

Finance Minister, Arun Jaitley announced a number of measures to help the drought struck farming sector in the Union Budget 2016-17. A Long Term Irrigation Fund will be set up to help farmers in the drought prone areas. Organic farming will be encouraged in those areas that are rain fed and which make up almost 55 per cent of arable land. To promote organic farming the government has launched two important schemes one is the ‘Parmparagat Krishi Vikas Yojana’. Through this scheme 5 lakh acres of land will be brought under organic farming over the next three years. The second scheme is called the ‘Organic Value Chain Development in North East Region.’ This scheme hopes to add value to the organic produce that is grown in the North East region of India so that they can find a ready domestic as well as export market. A sum of Rs.412crore has been allocated for the two schemes.

Besides the two schemes at least 5 lakh farm ponds and wells and 10 lakh compost pits will be dug in the rain fed areas. Compost pits will be used to produce organic manure. More farmers will be brought under the Soil Health Card Scheme so they can make informed use of fertilizers as they will be able to get information about the nutrient level of the soil. The government has also approved the conversion of city waste into compost and fertilizer companies will market city compost which will help to increase crop yield along with judicious use of chemical fertilizers.

Organic farming is something that is being encouraged all over the world because it not only helps local farmers market their produce but also balances the ecology in a way that helps retain soil fertility and control pest problems. Organic farming prevents the problems from occurring and so it conserves the agro-ecosystem. Damage to the environment is discerned only after it has occurred but with organic farming the natural resources are prevented from degrading, soil remains stable and nutrient rich, waste is recycled, natural pollination is encouraged and the habitats of animals remain intact which is important for the eco-system to survive. The biggest advantage of organic farming is that it reduces dependence on pesticides and chemical fertilizers. Agriculture is conducted on the principles of crop rotation, organic ‘green’ manure, biological pest control and natural soil formation.

The organic farming body called the International Federation of Organic Agriculture Movements (IFOAM) defines organic farming as “Organic agriculture is a production system that sustains the health of soils, ecosystems and people. It relies on ecological processes, biodiversity and cycles adapted to local conditions, rather than the use of inputs with adverse effects. Organic agriculture combines tradition, innovation and science to benefit the shared environment and promote fair relationships and a good quality of life for all involved…”

All over the world the use of chemicals in agriculture is being discouraged as it has encouraged pollution and climate change. Organic farming on the other hand

• encourages the well-being of the soil, plants, animals, humans and the entire earth
• food is healthier and more nutritious and encourages good quality of life
• resources can be preserved for future generations
• organic farming methods work on the cycles of nature

While organic food could be a little costlier it is healthier and full of nutrients. Research has shown as compared to conventionally grown foods organic foods have more antioxidants or polyphenols as compared to inorganic produce. There is a lower incidence of detectable pesticide residue in organic foods whereas in inorganic foods it is four times higher. Organic crops also have lower concentrations of cadmium and nitrogen.

Organic food products are marketed under a certificate that marks the foods as being organic. In India standards for organic products were established in 2000 when the National Program for Organic Production (NPOP) was established. The NPOP standards for production or organic foods and accreditation system are recognized by European Commission and Switzerland and the USDA as being equivalent to standards in their countries. These countries are willing to import Indian organic products if they are certified by the accredited Certification Bodies of India.