A new interpretation on GM foods-Will such window dressing impress the consumers?

The debate about the safety of Genetically Modified Organism (GMO) foods never seems to end and in fact it is becoming more and more bitter and acrimonious day by day. The vacillating attitudes of government policy makers regarding making labeling mandatory for foods derived from raw materials raised by genetic modification are making the consumers more and more disturbing leading to world wide campaigns to ban such foods until their safety is established beyond a shadow of doubt. Massive consumer movements and multi pronged initiatives by consumer groups across the world demanding at least forcing the industry to declare on the label presence of GMO ingredients are gaining momentum and it is a question of time before the industry has to bow before such cascading consumer pressure. A simple question as to why the GMO industry is fighting tooth and nail to sabotage plans for making label declaration mandatory is- why are they doing it if GMO foods are absolutely safe? May be industry has a feeling that consumers will boycott such foods if they become aware of presence of GMO ingredients in such products. Added to this many products carrying declaration that they do not contain GMO ingredients provide a ready platform for consumers to go selectively for such "neat" foods as perceived by them, in preference to the GMO containing ones. Ultimately it boils down to the impact this will have on the bottom line of many GMO food peddlers! 

Food and Drug Administration (FDA) of USA whose dictats are followed by many countries across the world has been very circumspect in its interpretation and policy orchestration vis-a-vis GMO foods. For ages FDA has been maintaining that GMO foods are "almost" like natural foods and are safe to consume by human beings. Probably such a policy support to the GMO industry has created a situation in that country where more than 80% of the processed food products made and marketed contain one or more GMO ingredients without the innocent consumer ever knowing about it! Does this not amount to deception by a government supposed to be the most democratic in the world? Is this ethical? Of course in an over democratized country like the US every individual has the right to do what he or she wants and true to this "ideal" the elected representatives also practice their fundamental right to say and do what they feel is right. It is another matter that a majority of these law makers are obliged to the GMO lobby because their elections have been bank rolled by them and they feel it is not correct to let their clients down by siding with the citizens though they forget that they owe their power to the very same electorate! 

Here is a contradiction which is very difficult to explain away. In some of the states the proposal to make declaration of GMO ingredients mandatory failed ballot initiatives giving an impression that people are not too concerned about this issue. On the other hand surveys after surveys have shown that more than 80% of the citizens want to make such labeling compulsory! This has been attributed to the massive propaganda unleashed by the GMO lobby to "brainwash" the consumers through half "truths" and "no truths" about the safety of GMO foods. To an ordinary citizen it does not make any sense to adopt GMO foods because nature provides foods which have been found safe over centuries and why there should be attempts to tinker with nature. Hybridization technology practiced since long takes time to give desired results but the resultant hybrids generated due to natural gene mutations are stable and safe, consumed since time immemorial. Also not easily understood by the common man is the advantage of GMO foods for them or for the humanity as the claims of increased yield through GMO technology has never been proven any where so far. Of course traits like pest resistance and others are incorporated through GMO technology but here again net advantage is not undisputed. 

Why is that the issue of GMO foods became a debating point again? Recent attempts by FDA to stop use of the phrase " does not contain GMO ingredients" by those not using them has created another unwarranted controversy and many feel that such an attempt is tantamount to punishing the citizen through denial of information about the nature of food being purchased by them. FDA feels that no one should use such declaration because many foods created through biotechnological process do not use genetically modified organisms all the times and most products are at best genetically "engineered" or "bioengineered"and therefore industry must shun using GMO word unnecessarily to avoid confusing the consumer. It is similar to saying that "no protein is present in an edible oil pack". May be there is a point and FDA may be right in issuing such an advisory which industry can adopt as long as no one uses the word GMO in any context. As far as consumer is concerned all he is interested is to know whether the food he is buying is made from natural ingredients with proven credentials. Whether the new FDA advisory is acceptable to the industry remains to be seen.

Many major food companies using genetic engineered food ingredients are happy that FDA has stuck to its position that it is not required for the processors to disclose presence of genetically engineered ingredients, sticking to its position that such products are not materially different from non-engineered versions. After all industry's efforts to resist mandatory labeling, fearing that customers will be scared off by foods known to contain genetically engineered ingredients seem to be succeeding. However the specious plea by them that mandatory labeling will drive the cost of the food cannot be accepted. It is a good sign that many major food companies have already moved to voluntarily label products that do not contain genetically engineered ingredients, either simply stating that on their packaging or using a small butterfly seal to show that the Non-GMO Project, a nonprofit that provides certification for food producers, has certified the absence of genetic engineered substances. Interestingly there is a genuine attempt by many manufacturers in the US to source non-GMO. ingredients which is a good sign as far as consumers are concerned. According to a recent report there are more than 30000 products in the US market carrying the label that they are free from GMO food ingredients and probably this sector may be worth about $ 13.5 billion which may be a fraction of the total retailed foods estimated at $ 638 billion last year.

The desire of the citizens for accessing clean and safe foods is reflected by efforts in the US in different states to mandate labeling of foods that do contain genetically engineered ingredients but they have largely failed by narrow margins, after heavy lobbying and campaign spending by the food and biotech industries. it is in this context that the law makers at the federal level passed a bill that would require food companies to reveal presence of genetically engineered ingredient in food products via a QR code, a pixelated square that can be scanned with a smartphone, on packaging that will reduce the chorus for hard printing the same on every label. Though it may be acceptable to many people who have adequate computing literacy to read the code before making a buying decision, a vast majority might not be able to decode to understand the nature of the product. In such a situation FDA also wants to differentiate between genetically engineered and genetically modified to convey different things to the consumers. According to them genetically engineered product comes from the efforts of biotechnologists originating in a laboratory while genetic modification happens by natural process as in hybridization process. Thus we have three technical terms which include Genetically Modified Organism (GMO), Genetically Engineered (GE) and Genetically Modified (GM). Of the three GMO is the most dreaded because genes from another species find their way into a particular food, though in small quantities. This means GM foods are analogous to natural foods while GE foods are similar but created in the lab with some distinct advantages. 

Consumer is still left confused to make out what each of this term means if industry starts using all three terms for declaring their products are free from them. Probably more positive approach could be to make those using food ingredients created through GE or GMO technology to declare the same unequivocally as a part of the transparency protocol which consumers are bound to appreciate. Whether industry will agree for such a transparent practice is some what uncertain at this point of time because of monetary implications. Efforts of many manufacturers to source raw materials not tainted by GE or GMO will get rewarded only if declaration of presence or absence of lab created food ingredients on the label of each pack..

V.H.POTTY
http://vhpotty.blogspot.com
http://foodtechupdates.blogspot.com

Fat is no more a dirty word for health conscious consumers? Another twist to "fat saga"!

Every American child from its early development stage has been fed on a food myth that butter and cheese are not good for their health and the food industry in western countries found an opportunity to cash on this understanding of the consumers, churning out thousands of food products with no fat or low fat. Saturated fat was a still dirtier word because of the repeated claims by many studies that they contribute to heart disease by raising bad cholesterol level in the blood. Healthy plant oils like Palmolein and Coconut oil became a permanent item in the"no buy" list of most families since they are rich in saturated fats! What a paradox? To day both these oils are becoming popular for the very opposite reason that they are healthy! It is true that all animal fats do contain cholesterol but that is no reason to shun them indiscriminately without realizing their good qualities. It is a good development that at least some scientists of modern generation are asking hard questions as to whether dietary guidelines formulated a generation ago were authenticated by exacting scientific studies that to day are mandatory before arriving at such far reaching conclusions. 

Imagine the population of the US at 220 million in 1983 when the above dietary guidelines were imposed and that in the UK at 56 million, started the shift from normal diet to low fat diet believing the norms as absolute truth. These guidelines restricted consumption of fat to 30% of the total dietary calories and that from saturated fat to 10% of daily calorie intake. Unfortunately there was no improvement in the general health status of the people consequent to the new paradigm introduced in these countries. On the contrary there was dramatic decline of health when measured in terms of CVD, obesity, diabetes and other diseases! This is not to argue that new dietary guidelines caused this slump but it has something to do with the changes in the diet of consumers, who replaced the fat with carbohydrates from refined grain flours and sugar-rich products to meet their overall calorie needs!. It is now more or less agreed that white sugar, fructose sugars and high gycemic index (GI) carbohydrates of refined grain flours are the real culprits in damaging the health of millions of Americans, Europeans and populations in other wealthy countries.

A curious fact brought out recently by a group of scientists from the US and Scotland is that because of taking a premature decision on fat consumption then, world is facing the present health crisis. Butter is a very common food adjunct used world over for centuries and by casting aspersion on its health credentials, a whole generation of population has been shunning it ever since the guidelines were issued in 1977. Same is true with cheese and other dairy products also. Even to day there is a sustained attack on milk consumption in the US and the dairy industry in that country is struggling with declining demand, with the per capita consumption continuously falling during the last few years, from 78 liters per person in the year 2000 to less than 70 liters in 2009 and further anticipated to decline by 3% in 2020!. What was the result of this presumed mistake? The obesity epidemic, heart disease, blood pressure, kidney ailments, cancer cases have devastated the people with no hope of coming out of this crisis. Possibly consumers, in order to meet their energy requirements started depending more and more on carbohydrates in stead of fat. Added to this another folly was committed by consuming carbohydrate foods mostly based on refined floors, white sugar and high fructose corn syrup (HFCS)! Further damage was done by decreasing consumption of fruits and vegetables which are considered the most health friendly foods in this planet! Is this not a right recipe for disaster?

It is too often forgotten that food cannot be considered in a fragmented format in terms of fat, carbohydrate, protein, fiber and other nutrients but should be looked at holistically through the every day diet people consume. If this is an accepted fact, then man will be well off if a mixed diet containing whole grains, healthy fats, proteins from lean meats or legumes, milk, fruits and vegetables are consumed regularly without over eating. There is a feeling now among scientists that the food market of to day is dangerously weighted against healthy foods and the consumers are not realizing the bitter truth that tastier the food more unhealthy it can be! This ground reality is being exploited by the industry in making market place foods highly tasty and mouth watering! Probably this situation may continue unless concrete action is thought of, to improve the "food environment" in the market place with more choices of healthy foods being made available while shrinking the portfolio of unhealthy foods! How this can be achieved is some thing the stakeholders in this triangle viz industry, government and the consumers, must sit together and take appropriate decisions.

V.H.POTTY

http://vhpotty.blogspot.com
http://foodtechupdates.blogspot.com

PARADOXES, IRONIES AND UNCERTAINTIES IN FOOD SCIENCE

Food is a zero sum game involving the producer, processor, consumer, environmentalist and the government and naturally as in any human endeavor unanimity on any issue is elusive. There are many areas where clarity and transparency are not adequate enough to separate the grains from the chaff. Though science and scientific research are supposed to pursue to seek truth, in this particular area of food science clarity, transparency and unbiased information are more conspicuous by their absence. Practically on all issues scientists engaged in research on food and allied areas seem to be vertically divided putting every body concerned in a quandary regarding the significance of their findings. Here are a few areas where such a deep divide is distinctly visible.

Top on the list is genetically modified (GM) foods about which millions of words have been spoken and written. Yet no reasonable degree of agreement is in sight whether they are good, bad or indifferent, putting the consumer and the government in great disarray, making it difficult to make a value judgement. While GM food crops are banned or controlled in many countries, the US is the only nation in this planet which has taken the stand that they are safe and there is a serious allegation that FDA is influenced more by the economic clout of the GM food industry than the well beings of the citizens. It may be recalled that greatest achievement of Biotechnology is the spawning genetic engineering technique to play around with the native genes of natural food crops by introducing external genes with best traits. To day more than 80% of the food products in the American market contain GM food ingredients without the consumer fully aware of this truth. It is a intrigue as to why rest of the world avoids GM foods while the US accepts them unreservedly! Probably the major reason is that GM crops are much more input intensive and therefore costlier to cultivate. Safety questions are still to be answered unequivocally through clinical trials and till this is settled, it is unlikely that the entire world will embrace GM technology for food crops. Added to the concerns of safety scientists are the vociferous protests from environmentalists crying hoarse about the destruction of gene diversity through cross contamination of traditional crops.

Another controversial subject is the nature of diet ideal for good health. World's population can be broadly divided into herbivores and omnivores based on the dietary practices followed by them. While herbivores depend heavily on plant foods omnivores are invariably lovers of animal foods. Many herbivores do consume milk which is an animal derived food while vegans are strict vegetarians not able to tolerate any foods linked to animals. From time immemorial, the debate regarding the necessity of animal based foods for maintaining good health never resolved the issue and even to day there are fierce proponents of animal foods without which they feel they cannot survive. But such an argument cannot stand scientific scrutiny because there are millions of people, especially in Asia who can boast of excellent health without consuming any non-plant foods during their life time. It is claimed that many nutrients present in meat, fish and egg are absent in plant foods and hence vegetarians are always disadvantaged nutritionally. If the vast vegetarian population in countries like India has survived for centuries without any major ailments, how can one justify killing of animals for human food? If it is a question of taste preferences that determine the dietary practices, eating meat foods probably can be justified but not based on health and nutrition. 

One day salt is blamed for all the illnesses faced by humanity. But there are many skeptics who are equally vehement in saying that the on-going campaign to drastically cut down on salt consumption is just an over reaction of a world that does not know how to tackle the explosive growth in number of human beings facing threat of annihilation from diseases like CVD, cancer, blood pressure, kidney ailments, diabetes, Alzheimers etc. It is true that salt has a critical role in human metabolism and there has to be a minimum that is essential to maintain normal health. With adequate body mechanism to excrete excess sodium through perspiration and urination already in place, is it not common sense that salt can  be dangerous only if taken in huge quantities? Well, common sense can be wrong some time and scientists have a point when they say that salt taken through processed foods can cause excess intake if not properly moderated. Before the advent of modern food industry people have been consuming salt cured vegetables, fish and meat and pickle has been one of the most consumed side accompaniment in all meals in India. If salt is truly that dangerous, the population in India should have a high incidence of blood pressure and kidney diseases! 

Same applies to sugar also. High incidence of diabetes has invariably been argued to be the reason for diabetes though over weight and obesity are equally responsible for the so called insulin insensitivity. Again one has to remember how much sugar sweetened preparations were consumed during olden days when incidence of diabetes was far and few. The fruit preserves, flavored syrupy drinks, Indian sweet meats and hundreds of similar preparations were part and parcel of diets of people of yesteryear but people dying from diabetes was rarely heard! Added to this came the controversy that high fructose syrup, a cheap sugar substitute from Corn is more obesogenic than cane sugar though the evidence available so far is not so convincing. It is not realized that sugar plays a role only after the onset of diabetes and not before and any restriction on sugar consumption is because of the onslaught of the disease. Probably diabetes has more to do with over consumption of calorie rich foods rather than consumption of sugar alone. After all body has to convert excess calories into fat if adequate expenditure of the same is not ensured through proper physical exercise. 

The story of fat is at best a crazy one with each interpreting the scientific evidence in a different way and putting scare into people. For any given time one fat or the other is taken to the altar as healthy ones and others implied in one disease or the other. Coconut oil is an example and till early nineteen nineties it was branded as a bad oil for the heart because it solidifies at 23C and hence could cause atherosclerosis! It is later realized that short chain fatty acids like Lauric acid present in Coconut oil and Palm kernel oil can be really beneficial to human beings. Even to day many consumers refuse to believe that it is a healthy oil due to decades of stigma attached to its use. While liquid oils were hailed as the ultimate in fat consumption vis-a-vis health, the consumers were further confused by the so called ratio of Omega-3 to Omega -6 acids and it was on this score that many liquid oils became suspects for health pundits.

What about eating fish? Tons of reports exhort people to consume fish regularly in the diet as they are supposed to contain omega-3 fats so beneficial for low blood cholesterol and healthy heart. However if recent studies are any indication consumers will have to be doubly careful in eating too much fish because of increasing levels of mercury found in commercial fish which has the potential to damage brain function in human beings!   Imagine the state of mind of a family which faithfully include fish in their main diet if such reports raise doubts about the safety of fish in general! Recent studies tend to suggest that even traces of mercury can be harmful, especially to children and this throws further scare into the minds of families intending to add fish to their diets. While countries like the US may have adequate testing infrastructure to monitor and certify safety of fish products what about the fate of developing countries where food safety is more a myth than reality? 

Antioxidants and foods rich in these phytochemicals form the foundation of a thriving health food industry offering a plethora of well being products at astronomical cost mining billions of dollars from the purses of health faddist consumers. Antioxidants are important metabolic chemicals so necessary to neutralize oxy radicals generated in human body which in excess can cause carcinogenic reactions with terrible consequences. But what is not revealed by these peddlers of health foods is that most such complex antioxidant preparations have doubtful value because when they are taken through the oral route very little portion is absorbed by the blood and there fore the quantity ingested may not be adequate to push in the optimum levels of metabolizable antioxidant molecules for utilization by the body. Adding to this confusion is another study which says antioxidants tend to prevent inflammation which in turn is supposed to be not good while for healing wounds in tissues some minimum inflammation is necessary. How can a common man decide how much and what type of antioxidants can be taken without compromising on his body's ability to heal tissue damages? 

Caffeine, that rich stimulant so conspicuously present in natural plantation products like Coffee, Tea and Cocoa, is at the center of a fierce controversy regarding the levels at which it is not dangerous to human health. Unfortunately there is no upper statutory limit agreed upon by the scientists, safety agencies and the industry and the merry go around goes on and on with commercial products flooding the market containing Caffeine at levels much beyond what is present in natural beverage preparations. Why consumers are patronizing such products containing abnormally high levels of Caffeine is a big mystery, hard to understand! There are reports of death among some consumers, purportedly taking synthetic beverages containing high levels Caffeine and still safety authorities seem to be undecided about banning such products from the market!   

Who ever has not read the "Guarantee" offered by the Chairman of a food company ( an MNC) to achieve cholesterol reduction if its branded oatmeal preparation is consumed continuously for 30 days! It is a travesty of truth as even those consuming oats for years are not able to reduce cholesterol unless drastic restriction in intake of saturated fat is resorted to in daily diet! If this is true, can any one justify investing on buying oats which costs at least 3-4 times the cost of whole wheat, hoping to bring down the cholesterol in quick time? Oats, no doubt is a good source of soluble fiber which contributes to good gut health but so too is Barley, a grain at least 70% cheaper than oats which contains higher levels of soluble fiber. The so called new "emerging" grains ( they are really old !) like Quinoa, Chea etc which of course are more nutritious and healthy cost almost 5-6 times higher than wheat and it is beyond one's comprehension as to why any one has to replace wheat or other grains like unpolished rice or the so called coarse grains which if consumed without refining can be as healthy as these "miracle" grains!

Under these circumstances can any consumer be in a position to decide what should be eaten or not eaten to preserve his health? Ultimately the right formula of keeping oneself healthy is to consume a diverse diet based on locally available food materials, processed to the minimum extent and containing all representative components like cereals, pulses, spices, fruits, vegetables and nuts with occasional non-plant foods in moderate quantities. Forgetting to do daily physical activities can still negate any discipline one may practice in eating.           

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

THE BRAND WAR-INDUSTRY BRANDS VS RETAILERS' BRANDS

The important players involved in supplying processed food products to consumers are the manufacturer and the retailer and unless there is a close liaison between them the market cannot satisfy the consumer fully. It is rarely understood that the retailer acts as a conduit for feed back information from the consumer regarding the quality of a new product launched by the industry and similarly valuable data regarding sales of a product in a given time allows the industry to do mid-course correction to its products to augment the sales. Industry also gets valuable information regarding the competitors which is helpful in planning corporate policies and evolving market strategies to score over competitors. Retailers can favor some manufacturers over others by manipulating the shelf space given to each of the brand offered by them in their aisles. It is well known that some good brands are destroyed some times by the retailers while bad products get promoted through such shelf space maneuvering.

Are the retailers really so powerful that many industry players dread them for various reasons? Probably yes, depending on the extent of market dominance by the organized retailers. In many countries, especially the developing ones, market is largely controlled by small retailers or the so called traders or family stores with limited shelf space and low business volume. In such a situation it is usually the industry which dominates them because of the dynamics of business that prevail in these countries. While famous brands can dictate terms to small traders, the very same brands pay obeisance to supermarkets enjoying enormous clout. Many established brands refuse to supply products to the distributors who supply the products to traders unless the price is paid in advance and there are instances when even the loaded transport vehicle does not leave the premises of the factory unless Demand Drafts worth the value of the consignments are received by the manufacturer! Such a situation is possible only when organized retailing does not make up much of the consumer goods business in a country.

Another feature of organized retailing is that with its enormous financial muscle small manufacturers can be bludgeoned into submission and get as much as 40-50% margin in selling the products from the latter. Many small scale manufacturers are ruined because of this unjustified and irrational practice by big retailers. On the other hand retailing chains deploy another strategy in tackling the big brand owners by creating their own brands or in-house brands.to compete with the former and this more or less works when such shop brands are priced marginally lower. This is what is happening in many countries where organized retailing in the form of super markets, Departmental stores and Malls have practically monopoly of the market with very little presence of small players. Probably this is one of the fears that has barred the entry of multinational brands in processed foods into India. Not allowing foreign investment in multi-brand retailing so far has allowed a thriving small business community to grow so far unhindered or without any fear about the financial muscle of international retailing giants. Whether this situation, where not even 5% of the retail market is in the hands of organized business houses, will continue or not, depends on Government of India's policy orchestration in the coming months.

It is unusual for food industry, that too for large manufacturers to complain against monolithic retailing companies regarding the unfair practices indulged in by the latter adversely affecting their fortunes in a wealthy country like Canada as is being reported. What is true for Canada can be true in other countries too. The core of the complaint is that some giant retailers are slowly weeding out reputed brands by introducing their own shop brands which are sold cheaply. Besides affecting their business, food industry feels that such unfair trade practices destroy innovation at the ground level and by "copying" these brands retailers are able to reap a rich harvest at the expense of the innovating industry. Many retailing organizations do not have the wherewithal to come up with good new products as they lack expertise, personnel and infrastructure facilities, all of which cost lot of money. Other unfair tactics include prolonging the lead time for clearing new products, restricting shelf space arbitrarily and larger returns of unsold materials all having a bearing on the viability of new brands.  

The only way the mainstream industry can fight this new trend is to set up its own "Cash and Carry" stores where the branded products are sold in bulk, acting as a feeder source to small retailers who in turn can add their margin while selling them to the consumers. Already this concept has been established in Western countries and in India too there are some such wholesale stores where customer entry is restricted by pre-registered membership system. Imagine operation of such wholesale shops in large numbers in a country like India and what benefits this will confer on the small traders who operate even in remote rural areas carrying out their business earning a few rupees that sustain them. As it is, the small retail business community in the country is a vibrant one and it is not easy for foreign companies to dislodge them from the retail landscape so easily as they seem to be imagining. A few big domestic retailing giants have already learned their lesson as their big plans, started in 2005 to establish dominance in the retail market in India has come to naught forcing them to linger on without any appreciable presence during the last seven years!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FDI IN RETAIL SECTOR-THE HOB-SON'S CHOICE FOR GOI!

Government of India seems to be on the back foot while defending its sudden decision to allow foreign direct investment in the retail business with a hope to attract some of the global retail chains so that the rapid slide in Rupee's value could be stemmed. While there is considerable opposition to the move, some genuine and others political, there is no denying the fact that the decision was not timely and such a decision could have been taken after in-depth consideration of the impact of foreign retailing giants establishing their foot prints in the country. No doubt there are significant advantages as well as disadvantages for the country and a final decision can be taken only after the risk-benefit aspects are fully studied.

Look at the position taken by GOI as reflected by the grand statement by the Commerce Minister extolling the virtues of opening the retail sector to foreign direct investment through a series of glittering advertisements in almost all news papers immediately after the announcement. It gives a rosy picture to the citizens about the advantages of major global retail giants coming to India. However a close look at the ground reality will tell a different story.There appears to be a goof up regarding the number of towns, each with more than a million population eligible for setting up shop by the MNC retail chains and now it turns out that in stead of 53 cities mentioned by the minister, only 46 urban entities exist in the country that are eligible to attract FDI! Besides 25 of the above are under the administrative control of non-UPA governments which are hostile to the new policy leaving only 21 urban entities available to foreign companies to invest. The opposition party BJP is so hostile to the policy that one of its senior members from Uttar Pradesh even threatened to firebomb the foreign controlled super markets if established in that state!

Keeping aside the politics those who are stake holders in this development must introspect regarding the outcome of this policy under which global giants like the Wal-Mart, Tesco and others interested can set up modern state of the art super markets in some states in the country. A moot question is whether these MNCs will be interested in entering India under such a hostile environment and whether the potential business volume can justify huge investments in the area. Also to be pondered by these companies is how any one can manage access to agricultural and horticultural produce from the distant hinterlands of the country where average holding of a grower is hardly two acres. There are at least 200 million farmer families who need to be approached and linkage established for a cooperative partnership can only ensure regular supplies to the super markets. Is this not a mega nightmare that can haunt any investor? If GOI is to be believed these MNCs would invest 100 million dollars for back end operations like procurement, sorting, cold storage, refrigerated transportation etc and also would buy 30% of their product portfolio from SMEs though this provision does not apply to food products. But who will invest on the power generation, water accessing, roads and bridges and other accessory infrastructure so vital for protecting the quality and nutrition of the food handled by them? 

The claim that the new "policy" would generate 10 million jobs in 3 years seems to be a pipe dream and on the contrary with automated handling machines with capacity to be used by these giant companies, likelihood of some unemployment cannot be ruled out. Allowing for an attrition of 10% of the small traders, it is to be expected that about a million families will be adversely affected forcing them to seek their fortunes elsewhere. The earlier policy of allowing MNCs into wholesale sector was indeed sound because these outlets serve the small traders admirably well and many traders operating in far away areas, at considerable distances from major towns and cities use these "cash and carry" business organizations to procure their requirements for selling at a higher price locally, eking out a decent living. Even allowing 100% FDI in single brand retail may be acceptable because it can again serve as a feeder to thousands of small retailers operating in distant places.  

It is claimed that under the new FDI policy in retail, farmers would get a better price for their produce as there might not be middle men in such transactions between the Retailer and the Farmer but if the experience in other countries is seen such a dream may be transient till the competition from the local players is killed during the first few years. What prevents the MNCs from accessing materials from out side the country where they are cheaper and shun the local suppliers in the long run? China is a predatory country that can out price suppliers from any part of the world and some of the large retail players have established and cozy presence in this country. Under such a scenario can the farmers in the country expect higher prices to their commodities? If some of the large farmers in Punjab are to be believed entry of PepsiCo two decades ago has improved their productivity and profits very significantly but it must be borne in mind that PepsiCo is not known for its retailing business, being best in manufacturing processed food products of global repute. Will the retail MNCs provide support to the farmers the same way as PepsiCo has done for tomato and orange or ITC has done for wheat in Madhya Pradesh? Doubtful!

As for consumers there might be some initial advantages because of the ability of MNC retailers to practice predatory pricing for pushing out the local traders and domestic organized retail chains for establishing their supremacy in the market. The variable pricing practices in vogue in many developed countries cannot be repeated in India as the Maximum Retail Prices (MRP) have to be printed on the label as per Indian law. The usual strategy of a product being priced differently from shop to shop and for varying prices in the same shop over a period of time, for cross subsidization, cannot be deployed in this country because of the MRP provision. History is replete with examples as to the long term endurance of MNCs, sustaining losses for more than a decade, eventually able to recover their losses by extinguishing the competition. A look at the experience of Indian companies like Fortune group or Reliance group in retailing during the last 5 years will tell a different story and some of them have not been able to reach even 10% of their targeted volume of business with accumulated losses estimated at billions of rupees during this period. Domestic retailing giants have not been able to capture even 5% of the retail market which is predominated by more than 8 million small traders even to day.

There are some apprehensions that the unorganized sector of retailing might suffer if FDI is allowed but if the history of Indian retail industry is examined one can see the role played by them in making the life of Indian families comfortable through their friendly service in contrast to the "mechanical" or 'Robot" like service offered by super markets. Indian traders, most of them, thrive because of the confidence they enjoy from their customers and friendly service provided. It is inexcusable on the part of GOI not to have done a scientific study regarding the impact of large retail chains on small traders during the last few years from which valuable lessons could have been learned before formulating the new FDI policy. There is a feeling, not supported by any data, that Indian families are returning to their familiar "mom and pop" stores in increasing numbers after the initial euphoria of shopping experience in large super markets has declined. The reason for this, if true, must be found by field studies which only can bring out the ground realities.   

Whether the FDI policy on retail has been rolled back or suspended or on hold, the ability of the Central Government to clear the same is doubtful because of the "coalition dharma" to which most policy failures are attributed. Political survival seems to be more paramount than the interest of the country and if and when the policy is resurrected the country must  ask hard questions regarding various uncertainties cited above. Assuming that the doors are opened for retail FDI eventually, another million dollar question is how many major players will actually enter the country against the pre-conditions imposed and restricted areas of operation available to them. Any how the road ahead for the foreign companies may not be as smooth as they hope for and it may take years, if not decades, before they can establish any sizable presence on Indian soil!

V.H.POTTY

http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

EXTENDING SHELF LIFE OF FOODS-WHAT IS THE LIMIT?

Food technology strives to process and preserve food raw materials into consumable form for periods ranging from a few days to several years. But the consumer perception about fresh quality food does not help the technologists to actively pursue the research efforts to evolve processes that can ensure shelf stability beyond a certain extent. With the advent of refrigeration many foods can be preserved for a few days to a few weeks at temperatures ranging from 0C to 8C while most foods are preserved at sub-zero temperatures for a few months with minimum quality deterioration. While safety is of paramount importance, eating quality is the critical factor that decides the acceptability or other wise of the processed foods. It is always asked whether it is possible for food technologists to preserve food indefinitely or for long periods, say about 5 years. But a counter question would be who wants to eat a 5 year old food even if there is a workable technology?

A consumer is unlikely to pick up a product from the supermarket with 5 year shelf life if he has a choice of an alternative with two weeks life. Practically every house has a refrigerator with capacity ranging from 100 liters to more than 500 liters and the freezer chest coming with the Frig can carry a few items for consumption in 1-2 months. There are stand alone freezers with small to large capacities which are useful to larger families. These gadgets are normally useful for storing both short term needs as well as long period storage with the latter coming handy to "hoard" those products offered in the market from time to time at promotional or stock liquidation programs. The very fact that consumers have a tendency to pick up products from the shelves with most recent manufacturing date reflects their innate desire to buy products as fresh as possible. This again raises the question whether there will be any takers for products with extra long life?

Food is to be preserved from two angles. First and foremost it has to be safe. The eating quality comes next but it is crucial for a competitive market that food offered has most acceptable sensory quality which includes flavor, texture and taste. Historically preserved foods using salt, sugar, acidity and dehydration were only the choices till the middle of the last millennium and the consumers of yesteryear were contented with the same for want of an effective alternative. To day situation is different with a vast array of technologies available that include canning, aseptic packing, vacuum packing, retort pouch process, irradiation, high pressure processing etc that can give products with varying shelf life from a few months to a few years. The outer space missions by countries like the US, EU, China and Russia require long life food products while military missions in far away places also stock such products. Natural calamity, undeveloped remote areas, especially in the third world countries also depend on preserved products with long shelf life.

Another relevant question is who will make products with long shelf life? The food industry which works incessantly to lure the customers to the products turned out by it wants the customers to increase the frequency of purchase as much as possible and by putting long life products in the market the manufacturers naturally are bound to suffer due to slower turn over. The industry requirement is a maximum shelf life of 9-12 months which gives them sufficient time to distribute the products with least damage and minimum recall in large countries like India. One of the biggest problems faced by the industry is the mandatory provision under the labeling regulation to indicate the manufacturing date on the label which leads to the customers picking up the most recent ones which they believe to be of best quality. The possibility of products manufactured during earlier dates remaining on the shelf without sale and evetually being returned is very high. The market pull will always be the force that is capable of dictating terms to the food scientists for their development agenda and probably long life products will invariably be the ones with least priority.    

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com