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Indian Economy

Ministry of Agriculture & Farmers Welfare

Private Investment in Agriculture and Agro Processing Industry

Posted On: 07 FEB 2020 3:34PM by PIB Delhi

The Government has been promoting private investment in agriculture through Public Private Partnership through schemes in the areas of Agriculture Marketing, Soil Health Card, Micro Irrigation etc. The Government of India has also circulated a  Model Act-Agriculture Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 and Model Act-Agriculture Produce & Livestock Contract Farming and Services (Promotion & Facilitation) Act, 2018, with the aim to encourage more investment in agriculture. This Ministry has also incorporated a “Framework for Supporting Public Private Partnership for Integrated Agricultural Development (PPPIAD)” under the Rashtriya Krishi Vikas Yojana - Remunerative Approaches for Agriculture and Allied Sector Rejuvenation (RKVYRAFTAAR) in the scheme guidelines to facilitate integrated projects led by private sector players in the agriculture and allied sectors, with a view to aggregating farmers, providing additional income and integrating the agriculture supply chain.

To promote food processing industries and attract investment into the sector, the Government has taken various steps/measures/policy initiatives which includes permission to 100% Foreign Direct Investment (FDI) through the automatic route in manufacturing of food products and 100% FDI under Government approval route for retail trading, including through e-commerce, in respect of food products produced and/or manufactured in India, creation of a special fund of Rs.2000 crore in National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit to food processing projects/units, bringing food & agro-based processing units, cold storage units/cold storage chains under the ambit of Priority Sector Lending (PSL), allowing 100 percent income tax exemption from profit derived from activities such as post-harvest value addition to agriculture by FPOs’ having annual turnover up to Rs.100 crore, 100% income tax exemption for new food processing units for a period of five years and lower income tax rate for subsequent five years, 100% deduction for capital expenditure incurred on setting up and operating of cold chain facility, concessional import duty for plant and machinery under project imports benefit scheme, import duty exemption on import of raw material under advance authorization etc.

The Government is implementing a scheme called the Pradhan Mantri Kisan Sampada Yojana (PMKSY) with the following scheme components viz; (i) Mega Food Parks, (ii) Integrated Cold Chain and Value Addition Infrastructure, (iii) Infrastructure for Agro-processing Clusters, (iv) Creation of Backward and Forward Linkages, (v) Creation / Expansion of Food Processing & Preservation Capacities, (vi) Food Safety and Quality Assurance Infrastructure, and (vii) Human Resources and Institutions with the objectives, inter alia, to create modern infrastructure and efficient value/supply chain with a view to encourage and facilitate food processing industries for preservation and processing of all agro and marine produce. The Government is also implementing the scheme "Operation Greens"  for integrated development of value/supply chain of tomato, onion and potato (TOP) crops in selected States on pilot basis from November, 2018.  Under this schemes, financial assistance is provided  as capital subsidy in the form of grants-in-aid to individuals, farmers, entrepreneurs, organizations such as Central and State PSUs/Joint Ventures/Farmer Producer Organizations (FPOs)/NGOs/Cooperatives/SHGs/ Public and Private Companies etc. for setting up of food processing industries/units/projects.

This information was given in a written reply by the Union Minister of Agriculture and Farmers Welfare Shri Narendra Singh Tomar in Rajya Sabha today.



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