The agricultural product processing industry（APPI） is an area in which foreign direct investment（FDI）has a higher preference. The study of the different forms of FDI and its impact is directly related to investment policies and the effects of FDI utilization. This paper uses panel data, establishes a measurement model, and uses Cross Section Weights method to analyze the impact of different forms of FDI on the APPI, domestic investment and employment. The results shows that different forms of FDI have a significant effect on the APPI, joint venture FDI has a significant crowding-out effect on domestic investment and employment, and Sole proprietorship FDI has a slight crowding-in effect on domestic investment. Therefore, we must pay attention to the technology quality when introducing FDI, emphasizing the relevance of FDI and the industry chain, guiding farmers' participation, treating domestic and foreign investment equally, and emphasizing neutrality in competition.