The mess that is food regulation

The Hindu Business Line, September 03, 2015

By Pradeep S Mehta

The Food Safety and Standards Authority of India (FSSAI) has produced a volcanic blast in the Indian food processing industry.

In the process, it is not just Maggi or Nestle which has been singed; the law and the regulator, the Food Safety and Standard Act, 2006 (FSSA), and the FSSAI, have been scathed as well. This is especially after the Bombay High Court’s order questioning the lab test results and violation of the principles of natural justice by it, during the process. Both, consumer safety and investment climate are at stake; we need a convergent approach.

In the minds of consumers, while the credibility of the unorganised packaged and non-packaged food products was always in doubt the controversy has eroded their faith in one of the most trusted brands. The entire episode does not bode well for the development of India’s nascent food processing industry.

The industry in India
India is one of the largest producers of food products in the world, while the level of food processing is less than 10 per cent of the agri-produce. Some ₹44,000 crore worth agri-produce is wasted annually. Food processing has multiplier effects on our economy, being one of the largest employment creators. It provides a boost to farm incomes, reduces massive agri-produce wastage, enables value creation through the manufacture of packaged foods, drives investment in cold chain and storage houses, manages supply-side food inflation, attracts domestic and foreign investment, and contributes to exports, amongst others. The sector is especially significant for small and medium enterprises and creating non-farm jobs in rural areas. Due to this immense potential, it is a priority area in the ‘Make in India’ initiative.

For long, the Maggi debate has run along the lines of ‘for or against’ Maggi or FSSAI. Another set of commentators has raised the question of balancing consumer interests with the development of the food industry. However, it is wrong to assume that stringent food safety standards and their implementation runs counter to the development of the food processing industry.

The US for example, is a leading country in the food processing sector, with the world’s most credible and stringent food regulatory regime. Indeed, strong, credible, well-defined, transparent, predictable food safety and regulatory standards and their non-arbitrary, swift, regular implementation, is an imperative for the expansion of our food processing industry. An effective food regulatory regime creates a high level of national and international consumer confidence in processed food products.

The why-me syndrome
While the jury is still out on the Maggi issue, the entire episode raises a few pertinent issues. Why was only Maggi handpicked for the tests? The irregularities in the Indian food industry in the form of adulteration, lack of quality check, misleading labelling, sale of defective food products and other unfair trade practices that go on, are not exceptions but the norm.

Such singling out of one brand gives rise to sense of being victimised, opens the floodgates for political manipulation and corruption, and sets out the wrong precedent where not the rule of law but arbitrariness seems to follow. Such uncertainty also scares away existing and prospective investors from the food processing sector. The effect is already visible as companies withdraw their products from the market and put new launches on hold. Now, the FSSAI has launched an investigation into some other products, yet a uniform, non-arbitrary, across the board application of the law is still wanting. Before that, a reasonable period could be granted to the food industry to pull up its socks.

Further, if such glaring irregularities did exist, these did not occur overnight. How were they allowed to continue for such a long time? This reflects laxity on the part of Central as well as State food regulators, which are not undertaking regular inspections and testing of products. A lack of proper coordination between the two has also been pointed out. The varying results from different labs under the FSSAI bring the credibility of its tests under the cloud. The Bombay High Court order also underscores this fact.

The food industry has, in fact, highlighted that labs are substandard, their equipment is not upgraded, there is lack of modernisation, there are issues relating to corruption, a staff crunch and a lack of proper training facilities.

Coherence and credibility
The requirement of product approval requirement for ‘proprietary products’ — launched in 2013 and a major area of grievance for the sector because of the long delays it caused — has now been scrapped by the FSSAI, after the recent Supreme Court order against it. While greater clarity is needed on the procedure that will now be followed, this brings India closer to the global practice where companies do not require approval from regulators to launch a product, while also paving the way for adopting the international practice of registration of food processing enterprises and setting up a random inspection system.

The present uncertainty should be expediently removed, while continuously streamlining food safety standards to make them more comprehensive, coherent and up-to-date to innovations in the industry.

The food industry must be given a reasonable time to adapt and the implementation should be regular, non-arbitrary and credible internationally. This is the path to achieving the twin objectives of food safety and development of the food processing industry.

The writer is the secretary-general of CUTS International. This article has inputs from Sonal Shukla.

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