Decision to allow FDI in agro sector slammed


Stakeholders have objected to the government’s decision to allow foreign direct investment (FDI) in the agricultural sector of the country.

The Ministry of Industry, Commerce and Supplies issued a notice in the Nepal gazette late Monday regarding allowing FDI in the agricultural sector of the country.

According to the notice, FDI has been allowed for livestock farming, fisheries, bee farming, vegetables and fruits farming, oil, pulses, dairy industry, among other agricultural sectors. The notice has said big industries will be allowed to open under the condition that they export 75 per cent of their production.

However, the stakeholders have expressed their dissatisfaction with the government’s move.

Organising a joint press meet today, Dairy Industries Association (DIA), Nepal Dairy Association (NDA), Fisheries Association of Nepal, Central Dairy Cooperative Association Nepal and Federation of Central Livestock Cooperative expressed their strong reservations against the government’s decision.

Speaking at the event, Rajkumar Dahal, president of DIA said that the government has brought this policy for the vested interest of some multinational companies. “For a very long time the government has been trying to bring Amul, one of the biggest dairy product companies of India, to Nepal,” he said, “Besides, with the vested interest of multinational companies, the government is conspiring against the domestic industries.”

A Parliament meeting held on March 27, 2019 had already disallowed FDI in the agricultural sector. However, the government is taking advantage of dissolution of Parliament at the moment and implementing policies that will sound the death knell for the domestic industries, he added.

“While the country is becoming self-reliant on dairy products, bee farming, fisheries, among other few industries, there is no point in opening FDI in these industries,” he said, adding, “If the government does not withdraw its decision we will be forced to take to the streets.”

Meanwhile, Radha Krishna Sapkota, president of NDA, said the government has brought this policy despite objection of all the stakeholders.

“The policy is beneficial only for multinational companies,” he said, “Rather than making the domestic industries competitive, it will directly affect both industries and farmers.”

According to him, agro industries with investment of around Rs 85 billion will get affected due to this policy.

“Currently there is an investment worth Rs four billion in bee farming, Rs 11 billion in fish farming, Rs 30 billion in dairy farming, and Rs 40 billion in poultry farming. All these investments will be in risk once the FDI starts pouring in,” he added.

Amid this, former president of DIA, Araniko Rajbhandari said that the government should focus on how to promote and sustain local industries than bring foreign investment.

“Nepal has a very small market thus there is no need to attract multinational companies in the country’s agriculture sector,” he said.

He further said that once a multinational company begins its operation from the country, there is no guarantee that the government will monitor whether it is abiding by the criteria of exporting 75 per cent of its production. Moreover, the big industry will import raw materials at low prices in large quantities rather than purchasing from small farmers, he added.

The stakeholders have urged the government to withdraw its decision.