KATHMANDU, APR 26 - 2013
The Industry Ministry’s plan to open the poultry sector to foreign direct investment ( FDI ) has run aground after being rejected by the Cabinet’s Infrastructure and Development Committee. The proposal had been presented to the Cabinet last February by the then Industry Minister Anil Kumar Jha.
A meeting of the Infrastructure and Development Committee held a week ago decided that it would not consider plans tabled by the previous government unless the present government makes a fresh proposal. The Cabinet’s approval is mandatory as the Foreign Investment and Technology Transfer Act (FITTA) 1992 has barred FDI in 23 sectors, including the poultry sector.
“Though the committee has asked the ministry to submit the proposal with a minister-level decision, we have no desire to do so at present,” said Industry Secretary Krishna Gyanwali. He added that the ministry had been dissuaded from re-sending the proposal by the uproar from local poultry entrepreneurs against allowing foreign investment.
Poultry entrepreneurs have been up in arms against the ministry’s plan to withdraw the ban on foreign investment in the sector. A group of entrepreneurs belonging to the Nepal Poultry Association had also submitted a memorandum to the ministry asking it to revoke the decision. They have accused the ministry of reaching a decision without holding extensive consultations with them. The Industry Ministry has defended its decision saying that opening the sector to FDI would bring improved breeds, modern technology, generate employment and enhance the quality of local meat products.
The ministry said it planned to allow foreign capital in a joint venture model with foreign companies being allowed to hold a maximum share of 75 percent. They would have to make a minimum investment of Rs 500 million, and their poultry farm would have to keep at least 200,000 chicks. The ministry said it also planned to introduce a strict standard to ensure that FDI would not hamper domestic entrepreneurs.
The association said there are around 10,000 small and big poultry farms in the country. Around Rs 32 billion has been invested in the sector, which has an annual turnover of Rs 60 billion.
According to a Nepal Rastra Bank (NRB) study, Chitwan district is the largest producer of chicken meat in the country with a share of 35 percent. The district is also the largest egg producer, accounting for 60 percent of the total production.
“Though the decision had been taken to attract FDI in the poultry sector with the view of making it more competitive and professional, the Cabinet’s rejection of the proposal and protests by entrepreneurs have discouraged the ministry from going forward with this idea,” said Dhruba Raj Rajbanshi, director general of the Industry Department.
Source: The Kathmandu Post
The Industry Ministry’s plan to open the poultry sector to foreign direct investment ( FDI ) has run aground after being rejected by the Cabinet’s Infrastructure and Development Committee. The proposal had been presented to the Cabinet last February by the then Industry Minister Anil Kumar Jha.
A meeting of the Infrastructure and Development Committee held a week ago decided that it would not consider plans tabled by the previous government unless the present government makes a fresh proposal. The Cabinet’s approval is mandatory as the Foreign Investment and Technology Transfer Act (FITTA) 1992 has barred FDI in 23 sectors, including the poultry sector.
“Though the committee has asked the ministry to submit the proposal with a minister-level decision, we have no desire to do so at present,” said Industry Secretary Krishna Gyanwali. He added that the ministry had been dissuaded from re-sending the proposal by the uproar from local poultry entrepreneurs against allowing foreign investment.
Poultry entrepreneurs have been up in arms against the ministry’s plan to withdraw the ban on foreign investment in the sector. A group of entrepreneurs belonging to the Nepal Poultry Association had also submitted a memorandum to the ministry asking it to revoke the decision. They have accused the ministry of reaching a decision without holding extensive consultations with them. The Industry Ministry has defended its decision saying that opening the sector to FDI would bring improved breeds, modern technology, generate employment and enhance the quality of local meat products.
The ministry said it planned to allow foreign capital in a joint venture model with foreign companies being allowed to hold a maximum share of 75 percent. They would have to make a minimum investment of Rs 500 million, and their poultry farm would have to keep at least 200,000 chicks. The ministry said it also planned to introduce a strict standard to ensure that FDI would not hamper domestic entrepreneurs.
The association said there are around 10,000 small and big poultry farms in the country. Around Rs 32 billion has been invested in the sector, which has an annual turnover of Rs 60 billion.
According to a Nepal Rastra Bank (NRB) study, Chitwan district is the largest producer of chicken meat in the country with a share of 35 percent. The district is also the largest egg producer, accounting for 60 percent of the total production.
“Though the decision had been taken to attract FDI in the poultry sector with the view of making it more competitive and professional, the Cabinet’s rejection of the proposal and protests by entrepreneurs have discouraged the ministry from going forward with this idea,” said Dhruba Raj Rajbanshi, director general of the Industry Department.
Source: The Kathmandu Post
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