Thursday, October 9, 2008


In the 2008 Farm Bill, the US Government included a measure that mandates the retailers to declare prominently on the label of some of the food materials the name of the country from where these have been procured. The items covered include meat, chicken, poultry, fresh and frozen fruits and vegetables, ginseng, macadamia nuts, pecans and peanuts. One fails to understand the logic of this law especially in a world trade regime supposed to be working with no trade barriers. If the imports of food products into USA are governed by strict protocols of quality and safety, why should there be another barrier such as this which will penalize exports from many countries in Asia and Africa in the form of consumer discrimination as these countries cannot compete with US products even if the quality and safety standards are same. The in-built prejudice in the minds of consumers against developing countries is based on the surmise that they are technically inferior to USA in terms of maintaining cleanliness and ensuring freedom from disease causing vectors.

The move in USA will hit badly Indian processors who make products under contract for US retailers under third party labeling and this will tell on the export of the products covered under the new labeling law. With more and more intrusive regimes and protocols like ISO, Organic Food Certification systems and SAP management being used these days in many food processing units, it is not justifiable to insist on declaring the country of origin in the label which has adverse implications on the trade portfolios of many countries. Already the hope for a universally acceptable barrier free trade regime, being negotiated under WTO is fading and the developing countries will have to evolve new strategies to counter such trends in putting unnecessary road blocks for unhindered trade in foods under one pretext or the other. Even in India, the consumer if given a choice, may naturally opt for a 'Made in USA' labeled product in preference to the desi one provided the there is no undue price distortion.

One of the reasons for the above move could be frequent incidences of food poisoning and epidemics reported in many developing countries which have created an image of unreliable safety regimes operating in such countries. Again what justification is there to treat a good processor in India, run by an American company, using American technology and using resources raised as per American standards differently and be categorized as 'Made in India' ? What is the meaning of calling the world a global village if such discriminatory practices are followed by rich nations depriving the poor countries of their export earnings? Is this practice an exercise to flex the muscles of rich nations through their superiority in technology and infrastructure built during colonial days? What is wrong if a country like India demands abolition of the obnoxious and obscene practice of agricultural subsidies to rich grower families, widely prevalent in USA and Europe for obtaining a level playing ground?

The claim that such labeling would help tracing future food safety problems is hollow because even other wise it could fix responsibility on the exporter and the importer having recognizable identities. Even within USA, the recent Salmonella and E.Coli poisoning episodes remain unresolved in spite of their enormous expertise, experience and infrastructure, proving how futile it is to pretend that other countries are inferior and irresponsible in food safety related matters. In stead of declaring on the label, the onus should have been on the importers to keep documentation regarding the origin of the food and it would be his responsibility to provide information regarding the source of imports for taking action whenever necessary. This is a typical example of the so called 'Technical Barrier to Trade' (TBT), the WTO is supposed to eradicate and protect the interests of developing countries!


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