Commerce and Industry Minister Nirmala Sitharaman, in an interview with BusinessLine , speaks about FDI in the processed food sector and the importance of crop insurance for farmers. Excerpts:

While you have opened up, or issued clarifications on, many sectors, a decision on allowing 100 per cent FDI in the processed food sector is still awaited. How soon can we see a decision on it?

The Finance Minister has mentioned it in the Budget. We are working out the details. Food Processing Minister Harsimrat Kaur has been pushing for it. There exists a need to invite more FDI in the sector because there is a lot of wastage of foodgrains. Value addition is something that will help farmers get better prices, for which FDI has to come in.

And once the sector is opened to FDI, domestic investments will also start coming in.

Will the government also allow FDI in e-retail of processed food, provided it is procured locally, since you have said there would be parity for brick-and-mortar stores and e-commerce?

We will talk about e-retail closer to the time of implementation. It is precisely the issue of parity which led us to give clarification on FDI in e-commerce. When the clarification wasissued, it was probably misunderstood by some who thought that the government had opened up the sector. Subsequently, they understood what the government had done.

It was a clarification on extending what was available to brick-and-mortar stores.

The latest to face scrutiny at the WTO is the crop insurance scheme — Pradhan Mantri Fasal Bima Yojna — announced earlier this year. This, even while you have been arguing about farm subsidy at the WTO. How will you handle it?

Crop insurance will have to be very clearly understood. We will certainly try and explain all aspects to the WTO. Crop insurance supports farmers when crops fail because of poor-quality seeds, untimely rain, lack of rains, hailstorm or El Nino-related effects, and severe drought. It’s not like there was no scheme for insuring farmers till now.

This scheme is better, as the premium is lesser and coverage is more. In the past, unless 50 per cent of the crop was damaged, farmers did not get reimbursement. Now, it has been reduced significantly and all weather vagaries have been included. It is affordable for farmers. But, insurance is insurance.

The WTO should be worried if it would distort trade, which insurance doesn’t. On the contrary, it helps farmers live their lives, even if crops fail.

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