VIETNAMESE AGRICULTURE-A LESSON FOR INDIA

Vietnam evokes past memories involving its long drawn out domestic war for domination between the communist philosophy and capitalistic practices during 1967-73. Eventually communism was able to prevail and the whole country was unified under one regime dominated by communist ideologies. While Russia as one sees to day is a poor shadow of the erstwhile USSR for which communism is being blamed, China projects itself as a shining example of communism as it has become a super global power, capable of challenging the most powerful nation on earth, the US, the very embodiment of capitalism. When Vietnam started its independent existence after the war, many did not give much chance for this small country to survive unless economically supported by its patron, the China. To day Vietnam is a vibrant country with reasonable economic strength and can be counted as a regional power of some importance in the Asian continent.

With a population of just 86 million, expected to go up to 120-130 million by 2030, Vietnam is second largest rice exporter, no small achievement for a country of predominantly rice eaters.

The GDP per capita of $2300 (PPP basis) is projected to increase substantially in the coming years after the economy and trade were liberalized. It is one of the few Asian countries with a literacy exceeding 92%. Its export earnings touched new heights and in 2008 the same was placed at $ 63 billion, more than 70% of its GDP, though its national debt also crossed 30% of the GDP. Besides rice Vietnam is also a significant exporter of coffee, marine foods, cashew and spices.

What is remarkable is the life expectancy enjoyed by the Vietnamese population at 72 years of age. Though there are 54 ethnic groups that co-exist in the country, there is hardly any communal disharmony witnessed during the past. Political will is reflected by the resolve of the government to banish hunger totally by 2012, boost farmer income 2.5 times by 2020 and increase average calorie intake to 2600-2700 kc per day per person.

Shifting of agricultural land to non-agricultural use in its pursuit of industrial development has shrunk the effective cultivated area by 3,60,000 hectares (ha) since 2000. The country produces 30 million tons (mt) of rice from an area of 4 million ha, the productivity touching 7.5 tons per ha, obviously due to use of modern technological tools. The grain storage capacity, so vital for cutting down post harvest losses, is scheduled to go up to 4 mt soon. Rice export which brings in substantial foreign exchange is estimated to be around 5 mt to 6 mt making the country one of the biggest exporters of rice in the world. An active policy to arrest the diversion of land use to non-agricultural activities is being put in place taking away such powers from the local authorities which is expected to keep at least 7.2 million ha for agriculture necessary to produce 40 mt of foodstuff annually.

With such strong political will and disciplined planning that ensures translation into action at the ground level, it is no wonder that Vietnam poses serious threat to Indian exports in areas like rice, marine products, coffee, cashew nuts and spices. Probably by building closer ties with this country, especially in areas like agriculture and food processing, India may be immensely benefited in the long run.

V.H.POTTY

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BUYER IS SUPREME: THE SELLER HAS NO CHOICE!

Food industry in India has achieved significant strides during the last 2 decades and food exports are increasing with more and more access to new markets, earning valuable foreign exchange. Quality and safety problems pose serious threats to smooth exports and frequent rejections of Indian foods in foreign ports are routine. Advent of protocols under ISO, HACCP, SAP etc was expected to help instill confidence amongst the buyers regarding the quality of food manufactured by the licensed production units. But this has not worked the way it was expected to do if we go by the records of the industry so far. The Salmonella scare of 2008 affecting tomatoes and jalapeno pepper, the latest involving peanut butter in USA and melamine tainted milk powder in China conclusively prove that there is no substitute to honest and conscientious efforts by the industry to discipline itself by eternal vigilance and uncompromising approach vis-a-vis safety and quality.

On an earlier occasion this blog had commented on the steps taken by FDA of USA to open offices in some parts of China, obvious intention being to pre-empt safety related problems affecting imports into USA. This action is on the premise that active involvement of the importer in the operations of the manufacturer would some how ensure strict compliance. Same approach was evident when FDA announced setting up of two offices in Delhi and Mumbai under the impression that every thing will be alright now on wards. But if the past records are any indication, it is doubtful if such intrusive steps can deliver the expected results.

FDA, which is under fire in its own country for its failure to protect the consumers due to the inefficient surveillance system in place, is burdened with both drug and food portfolios and it is not able to do justice to either of them. The open letter addressed by 100 scientists to the new President highlighting the corruption in FDA is still fresh in our memory. There is clamor for splitting FDA into two separate bodies, each devoting to drugs and foods exclusively. Added to this is the split responsibilities for food safety between USDA and FDA, former looking after meat and poultry regulation, rest being under FDA.

The current controversy on peanut contamination with Salmonella, originating in a plant in Georgia, was glaring at the regulators since 2001 but still no concrete action was taken to bring them to books. Interestingly this particular plant was regularly inspected by USDA personnel since the peanut butter supplied by this firm is distributed to school children under the national feeding program and still the culprit was not hauled up for violation of good manufacturing practices! This has caused recall of 1550 products in 45 states in the US because of the 575 illnesses reported due to peanut consumption. More scandalous is the fact that the peanut butter consignment rejected by the Canadian food authorities reentered USA through a border bridge between New York State and Canada though it was found to contain "filthy, putrid or decomposed substances unfit for food". The plant that manufactured the peanut butter under cloud in Atlanta, GA, was inspected by FDA authorities in 2001 and indicted for presence of cockroaches, molds, leaking roof and other sanitation problems but no follow up action was taken. USDA inspectors visited this plant routinely there after since peanut butter from this plant is regularly supplied for the school feeding programs across the country. A typical example of right hand not knowing what the left hand is doing!

If this is the efficiency of their surveillance program within USA, what a few officers, operating from the embassy in Delhi and consular office from Mumbai can achieve is a matter of conjecture. Probably the intrusive action may only delay shipments creating further problems to the Indian industry. It may justifiable for our industry to demand that once FDA clears their shipments in India there should not be any further time consuming procedural delays at the importing points. If this happens, some of the uncertainties associated with food exports to USA can be avoided. Since consumer is the king the seller may not have such a leverage with buyers under to day's economic scenario. At least Indian food industry can try striking a deal mutually acceptable to both the parties.

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