FDI in multi-brand retail will boost investment in cold-chain facilities and bring down post-harvest losses, benefiting farmers and consumers, Agriculture Minister Sharad Pawar said today.

“Post harvest losses in the country are high. There are losses in the entire supply chain from farm to market. Investment in cold chains is required. More investment to set up such facilities will come with the entry of FDI. This will benefit both farmers and consumers,” Pawar told reporters on the sidelines of an agriculture conference in New Delhi.

In a bold decision, the government has implemented its decision to permit 51 per cent foreign direct investment (FDI) in multi-brand retail despite stiff political opposition.

The decision led to Trinamool Congress walking out of the UPA Government.

It has also evoked sharp reactions from its allies including Samajwadi Party and JD-S as well as opposition parties.

Pawar said there would be initial problems in the implementation of the policy.

But once farmers and consumers experience benefits the states opposing the policy, will show interest.

At present only 10 states and Union Territories have conveyed their consent to the Centre on the issue.

In any case, Pawar said that the decision to allow foreign retailers to open stores is left to state governments.

“If states do not believe in it, they have right to decide their own policy,” Pawar said.

He also allayed concerns that with the entry of FDI the neighbourhood kirana stores would be wiped out.

“I have seen in different countries, small retail shops continue to function even after the entry of FDI. In New York city, you get to see both big departmental stores as well as small retail shops around hotels,” he remarked.

As per the policy, foreign investors are required to invest at least USD 100 million (about Rs 540 crore) and their outlets may be set up only in cities with a population of more than 10 lakh.

At least 50 per cent of FDI should be invested in ‘back-end infrastructure’ within three years of the first tranche.