Foreign food invasion

The colours, flavours and aroma of what India is eating these days have changed—and dramatically in some ways. Imported food items, both fresh and processed, are filling shopping bags in cities and towns as the global food trade zeroes in on India as a prime market. Many items of regular, if not daily, consumption, from Washington apples to the Vietnamese basa fish, have insinuated themselves into the palate of Indians, most of whom appear to be unaware of their growing dependence on foreign food.

Almost unnoticed, imported foods have been proliferating and growing in volume, their rising graph reflecting growth of the Indian economy and emergence of a new consuming class. The class that the trade likes to describe as the “modern Indian consumer”: a trendy, health conscious eater aware of global consumption patterns and ready to splurge that extra bit on foods seen as nutritious and of better quality.

WHO IS MANNING THE GATES?

SHORT-staffed and plagued by restrictions on its functioning, the Food Safety and Standards Authority of India (FSSAI) may be finding it difficult to keep tabs on constantly increasing quantities of food being shipped to the country. Till September, 2010, such imp orts were being monitored by Customs, but since then FSSAI, the nodal agency for ensuring food safety in the country, has been given the assignment. However, its jurisdiction is limited to four major ports of Chennai, Mumbai, Kolkata and Delhi; for the rest, it is still the customs authorities who scrutinise food shipment. FSSAI, which is under the Ministry of Health, is authorised to send samples of imported articles for analysis to central food laboratories in Kolkata, Ghazia bad, Pune and Mysore. Of these, the first two were directly under its control but in May this year the Ghaziabad laboratory was shifted to the Health Ministry. A senior FSSAI official says this would not have much of an impact on its functioning since there were 62 accredited private laboratories it could use as referral centres. Vinod Kotwal, director, CODEX, admitted though that the rising graph of imports—8.42 million tonnes during 2012-13—was posing challenges. According to her, there was need for a risk framework to switch over to a food inspe ction and sampling process to handle increasing volumes effectively. The other challenge is to ensure food safety at locations where FSSAI is not operating as Custom staff are ill-equipped for this task. But it is apparent that FSSAI is finding it tough to cope with the mounting pressure of imports. Among other problems, consumer organisations ha ve been complaining about incomplete or misleading la belling on a host of products. Quite often the information on the contents are in a foreign language such as Arabic since many consignments destined for the Gulf states are diverted or re-exported to India. At other times, products carry only the “best before date” and not the date of manufacture although the Food Safety and Standards (Packag ing and Labelling) Regulations of 2011 require complete information on the label. The biggest lacuna, points out Raj Kumar Bhatia, member-secretary of Azadpur Mandi, the giant wholesale market in Delhi, is the lack of standards like the European Union’s EUROGAPS for fresh produce coming into the country. As a consequence, the imported fruits could be substandard. The problem, he says, is that our focus is on exports for which we have strict norms governed by APEDA but none for imports.

While shops in affluent enclaves might have a profusion of imported foodstuffs from specialty cheeses to canned meats, the neighbourhood kirana store, too, is giving increasing shelf space to a number of imported items such as almonds and confectionery. In fact, the most substantive food imports are items of mass consumption: pulses and edible oils. Imports of these items are vital to keep Indian kitchens running as demand far outstrips domestic production. In case of edible oils, import dependence has soared from just about 3 per cent in 1992-93 to 50 per cent now, although India is one of the largest oilseeds producers in the world.

Massive inflows of cooking oils, mostly crude palm oil and palm olein from Malaysia and Indonesia, have helped raise their per capita availability from 5.8 kg in 1992-93 to 14.5 kg in 2010-11. But this has come at a huge cost. The tab for imports of over 10 million tonnes was Rs 46,255 crore during 2011-12, but is set to cross Rs 60,000 crore for 2012-13, an escalating figure that is far from sustainable, according to economists. Pulses are the other item that punches a big hole in foreign exchange outflows with imports for 11 months of 2012-13 being 3.53 million tonnes against the previous year’s 3.19 million tonnes. The bill so far: Rs 11,758 crore.



All this is a huge source of concern for several reasons, warns Jayati Ghosh, professor of economics at Delhi’s Jawa - harlal Nehru University. “India is potentially a ‘big country’ in world trade for all of its food import items, that is to say, it affects global prices by its entry/exit. We are already far too affected by global prices that have been extremely volatile, often for reasons unrelated to actual demand and supply but because of financial speculation, etc. To expose the country to import vulnerability is, therefore, insane and even criminal.”

But is any country self-sufficient in food or does it need to be, asks Sumit Saran, director of SCS Group, an agri business consulting firm that represents several US crop associations, such as the Pear Bureau Northwest and the US Apple Export Council, in the Indian subcontinent. “We should be looking at two distinct categories, that of supplementary and complementary foods. In the first category are those that India needs to import to meet the demands of its one billion plus population. Products like cereals, pulses, edible oil and sugar fall in this category. Complementary foods are those that are imported to cater to the demands of a burgeoning Indian middle class and its aspirations to be a part of the global consuming family.”

And what is this class eating? Tons of pasta, exotic fruits from a diverse range of countries, some fancy vegetables, premium cheeses and dairy products, among others. According to various trade reports, the market for imported complementary foods is estimated to be close to $1.5 billion. Fresh fruits, dry fruits and nuts, olive oil and processed foods, like confectionery items, beverages and pasta products, etc., are the fastest growing items in this category.

There appears to be a certain inevitability to food imports, given the size of the Indian market and its projected growth. Its $330 billion food market is expected to expand to $900 billion by 2020 while the current market for processed foods of $40 billion will increase to $300 billion in the next seven years. These are the figures that have left the global food industry salivating. The projection is that India, which is now the world’s 12th largest food market, will zoom ahead to the fifth place by 2025.

In the nineties, when India was forced to lift its quantitative restrictions on imports of most food items, these products were mostly for the well-heeled elite class with high incomes. Retailers of these products were few and availability was erratic. Now, with more widespread affluence and a sizable chunk of professionals boasting disposable income in a comparatively young consuming population, the market dynamics have changed dramatically. Today’s consumers are demanding similar diets and products that are available in London, Toronto or Sydney—and getting those as the suppliers, the medium and the market make it so much easier.

While imports of spices, dried fruits and nuts are skyrocketing, products like ginger and garlic are making a dramatic appearance on the import charts. Nuts, in particular, are big ticket item since India produces insignificant quantities of pistachios, almonds and cashews to meet the burgeoning demand. Raw cashew imports between April 2012 and February 2013 accounted for a steep outgo of Rs 5,085 crore.

The trick of the trade is to look for a health angle and make it the selling poi - nt. One reason imported fruits have become popular in a price-conscious market like India is that these are reputed to be more wholesome, whereas Indian vegetables and fruits are known to be sprayed heavily with pesticides that lead to health problems. Tarun Arora of Mumbai-based IG International, a leading importer of fruits and vegetables, says, “The niche is an entire set of people who are health conscious and it cuts across class and other barriers. It has helped our company turnover to increase by 20 per cent annually in the last five years.”

For instance, Kiwi, which was an unknown fruit to most Indians, is now selling well even at Rs 200/kg merely because it is reputed to fight dengue. The nutritional pitch has been most successful with imported apples, which have broken the seasonality barrier. Apples, imported from China, Chile, US, New Zealand, Italy and Germany are available all the year round on practically every street of Indian metros and bigger cities.

OIL WARS AND THEIR HEALTH IMPACT

Although India is one of the largest producers of oilseeds in the world, it still needs to meet half its requirement of cooking oil through imports. Herein lies a fundamental paradox: imports of cheaper edible oils have helped raise the per capita availability from 5.8 kg in 1992-93 to a substantial 14.5 kg in 2010-11 but this has also incre ased import dependency from just about 3 per cent in 1992-93 to 50 per cent at present. What do we import? The bulk of it is crude palm oil and RBD palm (77 per cent) and a bit of soybean oil (12 per cent) apart from crude sunflower oil (12 percent) and a minuscule amount of crude coconut oil. Over the past 20 decades the import lobby has been carrying on a campaign against coconut oil which was said to be high in cholesterol but is now making a comeback as discerning customers opt for the extra virgin quality which is enjoying a revival, specially abroad, for its many health benefits. Uneasiness about the health implications of eating palm olein has been growing after the publication of a Danish research study in November 2011 showing that the vegetable fat could behave more like lard in the body. Palm olein, a liquid form of palm oil used in cooking and baking, had so far been considered neutral in its effects on cholesterol but a research team at Copenhagen University found that men who ate palm olein had higher levels of LDL or the bad cholesterol and total cholesterol than those who had a olive oil diet. The rise in cholesterol seen in this study could increase the risk of heart disease by at least five per cent, according to some experts. In any case, olive oil whose nutritional benefits are accepted universally, has been the front runner in the league of healthy oils. In India, its presence has grown sharply over the past five years with imports, from Spain and Italy, growing at a smart clip of 30 per cent annually. The growth rate is expected to double in the wake of a focused campaign by the inter-governmental International Olive Oil Council (IOOC) on a series of events involving the media, the hospitality industry and schools. The three-year, ´éÇ1 million (Rs 7.9 crore) campaign by Madrid-based IOOC is also promoting a number of food festivals across the country along with an awareness campaign on the health benefits of olive oil. Imports in 2010-11 touched 42,000 tonnes valued at Rs 110 crore with extra virgin olive oil accounting for nearly 90 per cent of the value. Sumit Saran’s agribusiness consultancy SCS Group has been involved in the promotion and he believes the high growth rates “reflect a structural change in the way the affluent middle class is changing its cooking and eating patterns”.

Thanks to the health benefits it is supposed to confer, consumers across the country are happily paying Rs 10-20 more per kg for the imported fruit.

But although the import trade and consultants are pushing the health and nutrition angle, there are questions about the quality of foodstuffs that come into the country. For one, many of the processed foods and items carry labels showing date of packaging and expiry affixed by the importing agency and not that set by the manufacturer. For many a consumer this undermines the credibility and quality of the product, and retailers admit there is customer reluctance and suspicion about such labelling.

Who monitors the quality of imported foodstuff? All such imports come under the scrutiny of the Food Safety and Standards Authority of India (FSSAI). Its rules and regulations under the Food Safety and Standards Act of 2006 are detailed and, according to trade sources, onerous. But, oddly, since September 2010, FSSAI is regulating imports made only through Delhi, Chennai, Mumbai and Kolkata. Prior to this, foodstuff required a certification from the port health authorities that the product conformed to the standards and regulations of the Prevention of Food Adulteration Act (PFA) of 1954 and its rules of 1955, which were designed to keep out impure, unsafe and fraudulently- labelled foods. However, as the trade itself concedes, certification is, even today, based mostly on visual inspection and records of past imports as most ports have very limited testing facilities.

This leaves a loophole for the food trade.

FSSAI’s Vinod Kotwal, director CODEX, told Down To Earth that with the quantity and value of food imports increasing over the years, the authority is facing some tough challenges as its functioning gets more and more circumscribed (see ‘Who is manning the gates’).

The other shortcoming is that no standards have been prescribed for fresh fruits and vegetables. With exports having been seen for long as the priority for the economy, the focus has been on meeting the standards abroad and not vice versa. As a result, imports appear to have found the entry barriers not insurmountable, specially since the average consumer typically assumes that all that comes from abroad is of superior quality.

Several factors make it appear that food revolution will be irreversible. Right now it involves just the creamy layer of society, the 250 million affluent Indians, who make up the global consuming class. However, the remaining 900 million will be added soon, declares an optimistic food consultant. For one, there is the accelerated urbanisation and the resulting demand for processed, packaged, branded and value-added food and beverage products; more cosmopolitan tastes and a new breed of working women and young mothers who have neither the time nor inclination to cook.

“Most high-value imported foods are sold in metros and Tier-I cities,” points out Saran. “But some products like apples that are comparatively less temperature-sensitive and are able to maintain crispness even in ambient temperatures for five to seven days are making it to Tier-II and Tier-III cities.” His contention is that there are no rich or poor cities. “Each city, each area, has its share of rich and poor. So there always are discerning Indian consumers, who can afford imported produce and are willing to pay a higher price for better quality.”

The rule of thumb with fruit consumption across the globe is that “fruits are produced seasonally but consumed all the year round” and India is no longer an exception. The irony is that even Mother Dairy, a fully owned subsidiary of the National Dairy Developm ent Board, is offering imported fruits at its Safal outlets. Mother Dairy Fruit & Vegetable (MDFV) was set up to provide a market for Indian farmers through the cooperative framework and help them get the right price for their produce.

But Pradipta Sahoo, horticulture business head at MDFV, sees no conflict of interest in Safal hawking imported apples, pears, kiwi and other such exotica. “Please note that we are in a modern retail business running 400 booths/stores. Therefore, we need to provide consumers the choice of assortment of fruits.” Such compulsions mean imported fruits, mostly apples, are on sale to take advantage of the seasonal window advantage, which products from the US, New Zealand, China and Chile offer.

Besides, MDFV does not have enough storage facility for home-grown apples.

But there can be serious repercussions on domestic growers as India becomes one of the top 20 fruit importe rs in the world. Take for instance what happened to apples in 2012. While dom estic production was 2.2 million tonnes, consumption was 1.9 million tonnes inclusive of imports of 188,071 tonnes. With a retail market size of $4.9 billion, it is little wonder that agri-marketing companies representing foreign corporations are stepping up their promotions.

QUESTION OF FOOD MILES

THE American Granny Smith, a bright green apple for which some are willing to pay a huge premium, travels 12,000 km before it reaches consumers in Delhi. That is a lot of food miles the fruit totes up in its transcontinental journey and the resultant carbon impact on the environment. Should consumers feel guil ty as they bite into the sour crunchiness of the fruit? Would it be more environment-friendly to settle for the home-grown apple? More people are stopping to consider the impact that everyday goods—including food—have on the environment. Food miles is the distance food travels from field to plate and a measure of the environmental impact of the food we eat. In some countries, like the UK, half the vegetables and 95 per cent of the fruit comes from abro ad. And a sizable quantity arr ives by plane, leaving a higher carbon imprint be cause air travel gives off more CO2 than any other form of transport. In India, however, much of the fresh produce and all the processed food come by ship, which is the most environmentfrie ndly mode of transport. But as volumes of imported fresh fruit and vegetables increase, trade might opt for air cargoes for this segment. But reducing carbon footprint of food is not as simple as choosing not to buy imported produce. Consider the carbon footprint of food that is trucked, say, all the way from Himachal Pradesh to Chennai. There is another school of thought that the way crops are produced—organic and putting less stress on resources— should count more than food miles. A more compelling reason is the argument in favour of localised food systems, which bring farmers closer to the consumer and allow the latter to keep an eye on how food is grown and problems related to it. And nothing beats the traditional wisdom of eating seasonal. Despite the trade’s high-power promotion of a global supply system that obliterates seasonal barriers, food and sustainable agriculture experts say it makes more sense to eat fruits and vegetables in season and available locally. It leaves a minimal carbon footprint.

While Ghosh disagrees with the view that pasta, confectionery and such are elitist in nature “unless we subscribe to the view that masses of the country do not deserve to have a diversified or balanced diet”, she says there are other worries. “Sugar and fruit imports reflect not just free trade agreements and other tra de liberalisation measures that are making imports cheaper but also increasing corporate control over food distribution.” India will soon find itself in a cleft stick over the increasing tide of food imports.