Govt all set to open up poultry to FDI

KATHMANDU, FEB 27 -

The government has initiated process for opening the poultry sector for foreign direct investment (FDI). The Foreign Investment and Technology Transfer Act (FITTA)-1992 has barred foreign investment in 23 sectors, including the poultry sector.

Industry Minister Anil Kumar Jha tabled this proposal at the Cabinet on Tuesday. A week ago, a meeting of the Industrial Promotion Board (IPB), which is led by Jha, had directed the ministry to prepare the proposal.

Dhruba Raj Rajbanshi, member secretary of IPB, said the decision was taken so as to bring in improved breed, modern technology, generate employment in the country’s poultry sector, and to enhance the quality of meat products.

According to Rajbanshi, the decision was taken as per the request of poultry entrepreneurs and business associations like the Federation of Nepalese Chambers of Commerce and Industry and the Confederation of Nepalese Industries.

“Once approved from the Cabinet, the country could attract a significant amount of FDI in the poultry sector, making the sector more competitive and professional.”

The government plans to allow foreign companies to invest in the poultry sector in joint-venture model, with a maximum of 75 percent stake.

“Foreign investors will be allowed to begin poultry farming, provided they keep at least 200,000 chicks in a lot with a minimum investment of Rs 500 million,” he said, adding the government will introduce a strict standard in this regard.

Local poultry entrepreneurs, however, are divided over opening the sector to FDI. Some welcomed the move, while others criticised.

Narayan Hari Khatri, first vice president of Nepal Poultry Association, said FDI in poultry would ruin the local poultry industry and displace local entrepreneurs from the business . “Allowing FDI in the sector will affect around 80,000 households directly employed in the country’s poultry sector,” he said.

Khatri said the association has submitted a memorandum to the Industry Ministry to roll back the decision. Khatri also accused the government of taking the decision without holding wider consultations with them.

However, Anand Bagaria, managing director of Nimbus Group that deals in animal feed, welcomed the government move, provided the government focuses on introducing modern technology and large-scale investment.

According to Bagaria, the government should also focus on opening up other related business areas like food processing and effective distribution system for value addition in the traditional poultry business .

According to the association, there are around 10,000 small/big poultry farms in the country. Around Rs 32 billion has been invested into the sector, which has annual turnover of around 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.

Source: The Kathmandu Post