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GS Paper: GS3-10.Food processing and related industries in India-scope’ and significance, location, upstream and downstream requirements, supply chain management

  • Rejuvenating the Indian coffee industry

    coffee

    Context

    • Coffee cultivation is becoming an increasingly loss-making proposition in India. Already weighed down by the high cost of inputs and production as well as labor shortage, the industry is now also affected by changes in climate patterns, reports from Karnataka’s coffee heartland.

    All you need to know about Coffee plantation

    • Coffee is a tropical plantation crop.
    • 16° – 28°C temperature, 150-250cm rainfall and well-drained slopes are essential for its growth.
    • It grows on hilly slopes at the height of 900-1800m.
    • Low temperature, frost, dry weather for a long time and harsh sunshine are harmful for its plant.

    The status Coffee in India

    • India contributes about 4% of the world’s total coffee production. It ranks 6thin the world in coffee production.
    • At present, more than half of the total coffee production in India is produced by Karnataka alone, followed by Kerala and Tamil Nadu.
    • Coffee plants grow better in the laterite soils of Karnataka in India.
    • The Arabica variety initially brought from Yemen is produced in the country.
    • Indian coffee is highly rated and commands premium prices in the global coffee markets.
    • Indian coffee offering innumerable flavors, aromas and blends. The commodity, for several decades, enjoyed a special position in India’s export lists.
    • Coffee has high value and high imagery potential at home and overseas market. From being handled and sold as a berry, a green bean, a processed bean, a roasted bean and now a roasted and ground offering, coffee has climbed the hierarchy of value-addition.
    • Coffee was an important export item for the Union government, when the commodity’s exports were in the range of ₹4,000-₹5,000 crore annually.

    coffee

    Do you know the history of Coffee in India?

    • The history of Indian coffee dates back to around 1600 AD with the planting of Seven Seeds of Mocha by legendary saint Baba Budan in the courtyard of his hermitage in Chikmangalur, Karnataka. The coffee plants remained a garden curiosity before they gradually spread as backyard plantings, and later on to the hills of what is now known as Baba Budan Hills.
    • However, it wasn’t until the 18th century the British entrepreneurs started taking coffee cultivation properly and turned forests in Southern India into commercial coffee plantations

    What are Challenges faced by Coffee cultivation in India?

    • Impact of Climate Change: Drastic changes in climate patterns over the last few years have adversely impacted India’s coffee production and the quality of the crop. There were dry spells between 2015 and 2017 and unseasonal heavy rains, floods and landslides between 2018 and 2022. According to the Coffee Board of India’s post-blossom estimate, production for the 2022 crop is anticipated to be some 30% lower than the estimated production due to the extreme climatic conditions.
    • Impact of heavy rains: Destruction caused by heavy rains between July and September. The impact of the rains continues, with diseases affecting plants, and estate infrastructure suffering long-term damage. Plantations in Wayanad in Kerala and Palani in Tamil Nadu have also suffered similar losses. fruit rot, stalk rot and root rot and other irreparable damage due to heavy rainfall and landslides, berries turned black and dropped.
    • Emergence of New diseases: Erratic weather conditions are helping pests to breed and new diseases to emerge, further stressing coffee plantation.

    coffee

    Crisis in Coffee Industry of India

    • No adequate fund support by government: Sturdy and weather-resistant varieties of coffee may help and stand against climate change, but sadly the government is not providing adequate funds to coffee research stations to develop these.
    • The volatility in market prices marginalizing producers: The volatility in market prices and the reduced influence of producers in the value chain render coffee cultivation an increasingly loss-making proposition. Producers are getting marginalized. This is rapidly turning out to be a buyer-driven commodity market.
    • Impact of Exports on cost competitiveness: More than 75% of Indian coffee production is exported. This has an impact on the cost competitiveness of Indian coffee vis-à-vis the coffee that is exported from other producer regions, especially since those growers get their finances at very low interest rates.
    • High Cost of financing: Most private banks insist that growers provide collateral for financing. Since small and medium-size growers are invariably not in a position to provide collateral, the interest rates are high, at around 12%. International interest rates, on the other hand, are negligible, mostly in single digits. This is an advantage for competing coffee-producing region.
    • Increasing cost of Inputs: Due to the rise in the cost of inputs year on year and the increase in the cost of labor and benefits, which constitute 60% to 70% of total plantation expenditure, coffee growers are left with very little money in hand which is not adequate to repay loans. The cost of inputs around coffee such as fertilizers and agrochemicals has increased by almost 20% in a year.
    • No pricing mechanism: There is no official price setting mechanism even in the domestic market. So, traders and curers are calling the shots and fixing prices, and growers are at their mercy.
    • Identity crisis for Indian coffee: On the brand front, Indian coffee is still facing an identity crisis in global markets, although the country started exporting coffee actively before the 19th century. The fact that India sells Robusta and Arabic at a price higher than the hugely advertised Colombia is an indication of the brand building done by the Indian exporter and the quality of Indian coffee. Yet, Indian coffee does not have an individual brand identity in the international markets, Indian coffee was never considered a separate origin coffee. It was always used as filler.

    What are the reasons behind the High cost of production?

    • Rising labor charges: In India, production of coffee is low while the cost of production is on the rise compared to other coffee countries such as Vietnam and Brazil. In Brazil, labour charges account for 25% of the entire production cost, but in India, planters say they account for about 65%
    • Hard terrain and topography: It is possible to bring down the cost of production to some extent through mechanization, but India’s coffee terrains and topography limit this possibility. At the same time, Indian coffee has a unique positioning as it is shade-grown and grown at elevations, while other major producing countries grow coffee in flat lands.
    • High cost of Irrigation: Power cuts makes irrigation expensive as the cost of diesel is high. The high cost of inputs leads to the high cost of production which is the main problem for coffee growers. It makes coffee cultivation unviable. Earlier, the cost of production would go up by 4% to 5% annually, but now it goes up at least 20% annually.
    • Unskilled migrant labour and wage costs: There is increasingly a shortage of labor while the cost of labour is on the rise in the coffee sector. The children of workers in all the three coffee-growing States Karnataka, Tamil Nadu and Kerala prefer to move to urban areas. This means plantations are forced to depend heavily on migrant labours who are unskilled. A lot of effort, time and energy has to be invested in training migrant labours. As wage costs are not linked to productivity, growers are mandated to pay the usual wage along with other social costs such as housing and medicines, which adds up some 30% more to the wages. Most plantations simply don’t find skilled labour, especially for tasks such as shade-lopping, pruning, and borer tracing.

    coffee

    Way forward

    • Alternative source of revenue: Finding alternative sources of revenue and increasing domestic consumption on the one hand and branding and promoting Indian coffee better in the global market on the other.
    • Creating in addition revenue streams: Growers should create additional revenue streams through inter-cropping or through innovative measures. In addition to traditional inter-cropping of pepper and cardamom, coffee growers could try planting exotic fruit-bearing trees, food crops, or getting into fish farming, dairy farming, apiary or green tourism to increase incomes from their coffee gardens. For instance, progressive farmers from Thandikudi in Dindigul district in Tamil Nadu, and from Sakleshpur in Chikkamagaluru district, are growing avocados, mangosteens, oranges, guavas and other fruit bearing trees, amid their coffee plants. In some seasons they say they have even earned more money from these than from coffee and pepper.
    • Government should permit to plant alternate crops: Considering the change in land use, the government could permit growers to plant alternate crops in a land not suitable for coffee cultivation. Timely conversion will prevent growers from going financially sick.
    • Coffee Act and the new Coffee (Promotion and Development Bill), 2022: India’s share in the global coffee market may be less than 5%, but the coffee sector is hopeful that the Coffee Act and the new Coffee (Promotion and Development Bill), 2022, will do away the 80-year-old coffee regulation and usher in change.

    Conclusion

    • The coffee community in India, comprising close to 4 lakh coffee growers, hundreds of large planters, associations that represent growers, planters, curers and exporters, and over a dozen Fair Trade Organizations, hopes to boost coffee in the domestic and international markets and counter the problems the industry faces.

    Mains Question

    Q. Even after getting out of the shackles of the pooling system in 1996, the bean maintained a special status as a valuable export commodity for a long time. Discuss the problems of coffee industry taking a back seat in India and suggest solutions.

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  • Apple Farming in India

    apple farmersContext

    • The increasing cost of production and the increase in GST on apple cartons has triggered protests in Himachal Pradesh’s apple farmers.

    What is the issue?

    • The cost of production of agricultural items increased substantially, denying remunerative prices to the poor and marginal apple farmers.

    Reason for crisis in apple farming

    • Increase in cost of production: The input cost of fertilizers, insecticides, and fungicides has risen in the last decade by 300%, as per some estimates. The cost of apple cartons and trays and packaging has also seen a dramatic rise. In the last decade, the cost of a carton, for instance, has risen from about ₹30 to ₹ The cost borne to market the Produce has also risen.
    • High taxation: The increase in the Goods and Services Tax on cartons from 12% to 18%. This was done to ensure that farmers are forced to sell their produce to big buyers instead of selling it in the open market. Just as the three farm laws were designed on the pretext of getting rid of the middlemen, the argument here was that commission agents, who fleece the apple farmers, will be forced to exit the picture. But this leaves the apple growers at the mercy of large giants in procurement, who have precedence of even deciding the procurement price.
    • No MSP in Himachal: Unlike in Jammu and Kashmir, where there is a minimum rate for procurement, there is no such law in Himachal. The government also does not seem prepared to bring in such a law. The farmers are demanding that legally guaranteed procurement at a Minimum Support Price (C2+50%) should be ensured to improve apple farmers condition.

    apple farmersHow to address this issue?

    • Need for a regulator: What is required is an independent body that is duly supported and trusted by the farmers. Such a body should have representatives of apple growers, market players, commission agents and the government. This must be a statutory body that is also given the task of conducting research in the apple economy.
    • Directional efforts: Issues such as high input cost, lack of fair price and unavailability of infrastructure such as cold chains should be addressed.
    • Required research to support improvements in apple farming systems: Over the past few decades, the priorities in research projects and government policies on apple production were focused on the improvement of tree productivity and product quality. This was important to enhance the net incomes and living standards of apple producers in India. This research should be further enhanced by introducing European varieties in India.
    • Focussing on Alternative Market Channels: The alternative market channel works on the principles of decentralisation and direct-to-home delivery. The idea is to create smaller, less congested markets in urban areas with the participation of farmers’ groups and Farmer Producer Companies (FPCs) so that farmers have direct access to consumers.
    • Logistics transformation: To sustain the demand for agricultural commodities, investments in key logistics must be enhanced. Moreover, e-commerce and delivery companies and start-ups need to be encouraged with suitable policies and incentives. The small and medium enterprises, running with raw materials from the agriculture and allied sector or otherwise, also need special attention so that the rural economy doesn’t collapse.

    apple farmersConclusion

    • Agriculture is dying, not as in the production of food but as a desirable profession. One bad yield, whether due to errant rains, pests, etc., and most farmers have no buffer available. The last point worth considering is that food and agriculture are not the same. Expenditures on food span the value-add, including processing, preparation, service in restaurants, etc. Farmers in India merely get paid for their product and not for the food we eat.

     

    Mains question

    Q. Do you think there is urgent need to extend MSP to horticulture sector also? Discuss what can be done to solve the apple farmer crisis in Himachal Pradesh.

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  • Mandatory requirements for Packaged Commodities

    The Department of Consumer Affairs, Legal Metrology Division has notified a draft amendment to the Legal Metrology (Packaged Commodities) Rules 2011 making some compulsions.

    Discrepancies over Packaged Commodities

    • The Division has observed that many manufacturers/packagers/importers do not clearly label necessary declarations or prime constituents on the front of packaged commodities.
    • It is common for consumers to assume that brands’ claims are accurate, but such claims are usually misleading.
    • Such disclosure are deemed essential in order to protect consumer rights.

    What are the mandatory provisions under the Legal Metrology (Packaged Commodities) Rules, 2011?

    • It is mandatory under the Rules, to ensure a number of declarations, such as the:
    1. Name and address of the manufacturer/packer/importer,
    2. Country of origin,
    3. Common or generic name of the commodity,
    4. Net quantity,
    5. Month and year of manufacture
    6. Maximum Retail Price (MRP) and
    7. Consumer care information.
    • As a consumer-oriented policy, all pre-packaged commodities should also be inspected.
    • Rule 9(1)(a) provides that the declaration on the package must be legible and prominent.
    • The consumers’ ‘right to be informed’ is violated when important declarations are not prominently displayed on the package.

    What are the proposed amendments?

    • As many blended food and cosmetic products are sold on the market, the key constituents need to be mentioned on the product packaging.
    • Additionally, the front side of the package must contain the percentage of the composition of the unique selling proposition (USP).
    • Also, packages displaying key constituents must display a percentage of the content used to make the product.
    • The new amendments has suggested that at least two prime components should be declared on the package’s front side along with the brand name.
    • Currently, manufacturers list the ingredients and nutritional information only on the back of the packaging.
    • This declaration must also include the percentage/quantity of the USPs of the product in the same font size as the declaration of the USPs. However, mechanical or electrical commodities are excluded from this sub-rule.

    Back2Basics: Consumer Rights

    Consumer right is an insight into what rights consumer holds when it comes to the seller who provides the goods.

    In general, the consumer rights in India are listed below:

    (1) Right to Safety

    • Means right to be protected against the marketing of goods and services, which are hazardous to life and property.
    • The purchased goods and services should not only meet their immediate needs, but also fulfil long term interests.
    • Before purchasing, consumers should insist on the quality of the products as well as on the guarantee of the products and services. They should preferably purchase quality marked products such as ISI, AGMARK, etc.

    (2) Right to be Informed

    • Means right to be informed about the quality, quantity, potency, purity, standard and price of goods so as to protect the consumer against unfair trade practices.
    • Consumer should insist on getting all the information about the product or service before making a choice or a decision.
    • This will enable him to act wisely and responsibly and also enable him to desist from falling prey to high pressure selling techniques.

    (3) Right to Choose

    • Means right to be assured, wherever possible of access to variety of goods and services at competitive price. In case of monopolies, it means right to be assured of satisfactory quality and service at a fair price.
    • It also includes right to basic goods and services. This is because unrestricted right of the minority to choose can mean a denial for the majority of its fair share.

    (4) Right to be Heard

    • Means that consumer’s interests will receive due consideration at appropriate forums. It also includes right to be represented in various forums formed to consider the consumer’s welfare.

    (5) Right to Seek redressal

    • Means right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers. It also includes right to fair settlement of the genuine grievances of the consumer.
    • Consumers must make complaint for their genuine grievances. Many a times their complaint may be of small value but its impact on the society as a whole may be very large.

    (6) Right to Consumer Education

    • Means the right to acquire the knowledge and skill to be an informed consumer throughout life.
    • Ignorance of consumers, particularly of rural consumers, is mainly responsible for their exploitation.

     

     

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  • Tamil Nadu tops State Food Safety Index (SFSI)

    Tamil Nadu topped the State Food Safety Index (SFSI) this year.

    Food safety has been in news this year quite frequent. Do make a note of following – Recommended Dietary Allowance (RDA), Red Octagon, Eat Right Movement, Food Safety Mitra etc.

    State Food Safety Index (SFSI)

    • FSSAI has developed State Food Safety Index to measure the performance of states on various parameters of Food Safety.
    • This index is based on the performance of State/ UT on five significant parameters set by the Health Ministry, namely
    1. Human Resources and Institutional Data
    2. Compliance
    3. Food Testing – Infrastructure and Surveillance
    4. Training & Capacity Building and
    5. Consumer Empowerment
    • The Index is a dynamic quantitative and qualitative benchmarking model that provides an objective framework for evaluating food safety across all States/UTs.

    Highlights of the 2022 Report

    • Tamil Nadu is followed by Gujarat and Maharashtra. Among the smaller States, Goa stood first, followed by Manipur and Sikkim.
    • Among the Union Territories, Jammu and Kashmir, Delhi and Chandigarh secured the first, second and third ranks.

    Back2Basics: Food Safety and Standards Authority of India (FSSAI)

    • The FSSAI is an autonomous body established under the Ministry of Health & Family Welfare, Government of India.
    • It has been established under the Food Safety and Standards Act, 2006 which is a consolidating statute related to food safety and regulation in India.
    • It is responsible for protecting and promoting public health through the regulation and supervision of food safety.
    • It is headed by a non-executive Chairperson, appointed by the Central Government, either holding or has held the position of not below the rank of Secretary to the Government of India.

     

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  • What is the Service Charge levied by Restaurants on Customers?

    The Centre has called a meeting of restaurant owners over service charge levied by them on customers.

    Why in news?

    • The restaurants are collecting service charges from consumers by default, even though collection of any such charge is voluntary and at the discretion of consumers and not mandatory as per law.

    What are the components of a food bill?

    • A restaurant bill in India comprises food charge (from the menu), with an addition of service charge (anywhere between 5 to 15 per cent) and a 5 per cent GST on this amount (IGST+SGST).
    • This is for all kinds of standalone restaurants.
    • In case a restaurant is located inside a hotel wherein room rate is upwards of Rs 7,500 (mostly in case of five-stars), the GST would be 18 per cent.

    Nature of Service charge

    • While the GST is a mandatory component as per law, the service charge is supposed to be optional.
    • It is the equivalent of what is known as gratuity around the world, or tip, in casual parlance.
    • Most restaurants decide the service charge on their own, and print it at the bottom of the menu with an asterisk.

    Policy measures

    • The Ministry of Consumer Affairs had come out with “Guidelines on Fair Trade Practices Related to Charging of Service Charge from Consumers by Hotels/ Restaurants”.
    • Here it was clearly mentioned that a component of service is inherent in the provision of food and beverages ordered by a customer.
    • Hence the pricing of the product is expected to cover both the goods and service components.
    • It said that the bill “may clearly display that service charge is voluntary, and the service charge column of the bill may be left blank for the customer to fill up before making payment.”

    What do the restaurants say?

    • The levy of service charge by a restaurant is a matter of individual policy to decide if it is to be charged or not.
    • There is no illegality in levying such a charge.
    • Once the customer is made aware of such a charge in advance and then decides to place the order, it becomes an agreement between the parties, and is not an unfair trade practice.
    • GST is also paid on the said charge to the Government.

    Where does the fund go?

    • Restaurants claim that a major chunk of the service charge thus collected goes to the staff, while the rest goes towards a welfare fund to help them out during good and bad times.
    • It’s a default billing option, even as customers can choose not to pay it if they don’t want to.
    • Of course, they are paid the salaries but the service charge works as an incentive for them.
    • Restaurateurs also say that patrons can decide not to pay the charge and tip the server directly, but in this case, the backroom staff doesn’t get anything.
    • A service charge ensures all staff members are rewarded evenly.

    What is the issue then?

    • The issue is that almost all restaurants have put service charge (fixed at their own accord) as a default billing option.
    • And if a consumer is aware that it is not compulsory and wants it removed or wants to tip the server directly, the onus is on them to convince the management why they don’t want to pay it.
    • The department says they received several complaints saying it leads to public embarrassment and spoils the dining experience since at the end of it, they either pay the charge quietly and exit the place feeling cheated, or have to try hard to get it removed.
    • Also, there is no transparency as to where this charge goes.
    • The officials also say that collecting service charge on their own and paying GST on it to the government doesn’t make it authorised.

    Problems faced by customers

    • It is this component which has come under dispute from time to time, with consumers arguing they are not bound to pay it.
    • It also said that hotels and restaurants charging tips from customers without their express consent in the name of service charges amounts to unfair trade practice.

     

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  • Debate over Front of Pack Labelling (FoPL) of Packaged Food

    The Food Safety and Standards Authority of India (FSSAI) is expected to issue a draft regulation for labels on front of food packets.

    What is FoPL?

    • In India, packaged food has had back-of-package (BOP) nutrient information in detail but no FoPL.
    • Counter to this, FoPL can nudge people towards healthy consumption of packaged food.
    • It can also influence purchasing habits.
    • The study endorsed the HSR format, which speaks about the proportions of salt, sugar, and fat in food that is most suited for consumers.
    • Countries such as the UK, Mexico, Chile, Peru, Hungary, and Australia have implemented FoPL systems.

    What warranted such rating in India?

    • Visual bluff: A lot of Indian consumers do not read the information available at the back of the packaged food item.
    • Burden of NCDs: Also, India has a huge burden of non-communicable diseases that contributes to around 5.87 million (60%) of all deaths in a year.
    • Healthy dietary choices: HSR will encourage people to make healthy choices and could bring a transformational change in the society.
    • Supreme Court order: A PIL seeking direction to the government to frame guidelines on HSR and impact assessment for food items and beverages was filed in the Supreme Court in June 2021.

    Which category of food item will have HSR?

    • All packaged food items or processed food will have the HSR label.
    • These will include chips, biscuits, namkeen, sweets and chocolates, meat nuggets, and cookies.
    • However, milk and its products such as chenna and ghee are EXEMPTED as per the FSSAI draft notified in 2019.

    Will there be pushback from food industry?

    • Negative warning: Some experts opposed the use of the HSR model in India, suggesting that consumers might tend to take this as an affirmation of the health benefits rather than as a negative warning of ill effects.
    • Lack of awareness: This is significant because there is lack of awareness on star ratings related to consumer products in India.
    • Impact on Sale: Certain organisations fear it might affect the sale of certain food products.

    When will the rating come into force?

    • FSSAI’s scientific panel recommends voluntary implementation of HSR format from 2023 and a transition period of four years for making it mandatory.
    • It noted that the proposed thresholds are in alignment with the models implemented in other countries and ‘WHO population nutrient intake goals recommendations’.
    • FSSAI will analyse the nutritional information in 100 mg of packaged food.
    • The food safety compliance system licensing application portal will have a module for generating certificates wherein a licensee can enter details of a product.

     

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  • Health Star Rating System of FSSAI for Packaged Food

    The “health star rating” system that the Food Safety Standards Authority of India (FSSAI) plans to adopt in order to help consumers reduce their intake of unhealthy foods has been opposed by close to a dozen consumer and health advocacy groups.

    What is the Health Star Rating System?

    • In February, the FSSAI decided to adopt the “health-star rating system”, which gives a product 1/2 a star to 5 stars, in its draft regulations for front of package labelling (FOPL).
    • The HSR format ranks a packaged food item based on salt, sugar, and fat content and the rating will be printed on the front of the package.
    • The underlying premise of the HSR is that positive ingredients such as fruits and nuts can offset negative nutrients such as calories, saturated fat, total sugar, sodium to calculate the number of stars ascribed to a product.
    • The decision was based on the recommendations of a study by the IIM-Ahmedabad the regulator had commissioned in September 2021.
    • In the same meeting, the regulator decided that FOPL implementation could be made voluntary for a period of four years.

    What is FoPL?

    • In India, packaged food has had back-of-package (BOP) nutrient information in detail but no FoPL.
    • Counter to this, FoPL can nudge people towards healthy consumption of packaged food.
    • It can also influence purchasing habits.
    • The study endorsed the HSR format, which speaks about the proportions of salt, sugar, and fat in food that is most suited for consumers.
    • Countries such as the UK, Mexico, Chile, Peru, Hungary, and Australia have implemented FoPL systems.

    What warranted the HSR rating in India?

    • Visual bluff: A lot of Indian consumers do not read the information available at the back of the packaged food item.
    • Burden of NCDs: Also, India has a huge burden of non-communicable diseases that contributes to around 5.87 million (60%) of all deaths in a year.
    • Healthy dietary choices: HSR will encourage people to make healthy choices and could bring a transformational change in the society.
    • Supreme Court order: A PIL seeking direction to the government to frame guidelines on HSR and impact assessment for food items and beverages was filed in the Supreme Court in June 2021.

    Which category of food item will have HSR?

    • All packaged food items or processed food will have the HSR label.
    • These will include chips, biscuits, namkeen, sweets and chocolates, meat nuggets, and cookies.
    • However, milk and its products such as chenna and ghee are EXEMPTED as per the FSSAI draft notified in 2019.

    Will there be pushback from food industry?

    • Negative warning: Some experts opposed the use of the HSR model in India, suggesting that consumers might tend to take this as an affirmation of the health benefits rather than as a negative warning of ill effects.
    • Lack of awareness: This is significant because there is lack of awareness on star ratings related to consumer products in India.
    • Impact on Sale: Certain organisations fear it might affect the sale of certain food products.

    Arguments against health star rating

    • Experts argue that “warning labels” instead have been most effective in various countries.
    • They said the HSR system adopted in countries like Australia and New Zealand has not resulted in any meaningful behavior change.
    • Even after eight years of their implementation, there is still no evidence of HSRs having a significant impact on the nutritional quality of people’s food and beverage purchases.
    • Also, the HSR system “misrepresents nutrition science”.
    • The algorithm of adding and subtracting nutrients does not fit with our understanding of biology.
    • For example, the presence of fruit in a fruit drink juice does not offset the impacts of added sugar in the body.

     

     

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  • Unlock India’s food processing potential

    Context

    One of the largest producers of fruits and vegetables in the world to boost processed food in large quantities, India has formulated a unique Production-Linked Incentive Scheme (PLIS) which aims to incentivise incremental sales.

    Progress made so far

    • A sum of ₹10,900 crore has been earmarked for the scheme.
    • Beneficiaries have been obliged to commit a minimum investment while applying for the scheme.
    • Under Category 1, firms are incentivised for incremental sales and branding/marketing initiatives taken abroad.
    • Assuming the committed investment as a fixed ratio of their sales and undertaking execution of at least 75% of the projects, the sector is likely to witness at least ₹6,500 crore worth of investment over the next two years.
    • New alternatives are being explored which have immense potential in replacing the staples of rice and wheat in the form of Nutri-cereals, plant-based proteins, fermented foods, health bars and even fresh fortified foods for pets.
    • By welcoming the new brands in the category, PLIS aims to create an enabling ecosystem for innovation in both food products and processes.

    Way forward

    1] Improve infrastructure

    • A study in the United States concluded that a 1% increase in public infrastructure increased the food manufacturing output by 0.06% in the longer run (https://bit.ly/3rOeE0l).
    • This correlation holds good for India too as a higher investment is being concentrated in States such as Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Uttar Pradesh.
    • These States as reported by the Good Governance Index 2020-21, ranked among the highest in the ‘Public Infrastructure and Utilities’ parameter with ‘Connectivity to Rural Habitations’ showing the highest improvement.

    2] Improve profitability in export

    • For the exports market, it is now established that sales promotion is positively related to increased sales volume, but inversely related to profitability.
    • To bridge this gap, of the 13 key sectors announced under the PLIS, the ‘Food Processing PLIS’ earmarks a dedicated Category 3 for supporting branding and marketing activities in foreign markets. 
    •  This ensures that India’s share of value-added products in the exports basket is improved, and it may leverage on its unique geographical proximity to the untapped markets of Europe, the Middle East/West Asia, Africa, Oceania and Japan.

    3] Access to credit

    •  The access of micro, small, and medium enterprises (MSMEs) to finance is a perennial problem in the country, predominating due to a lack of proper credit history mechanism for MSMEs.
    • Smart financing alternatives such as peer-to-peer (P2P) lending hold potential for micro-food processors.
    • Access to working capital has in theory been addressed by the Trade Receivables Discounting System (TReDS), a platform for facilitating the financing/discounting of trade receivables of MSMEs through multiple financiers.

    Conclusion

    With growing populations, changing food habits and unrestricted use of natural resources, nations must come together and lay out a road map for a common efficient food value chain.

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  • Centre announces uniform norms for Fortified Rice

    Days after the Prime Minister’s announcement of a rice fortification plan, the Centre has issued “uniform” parameters for fortified rice kernels (FRK) for grade ‘A’ and common rice.

    Plan for fortified rice

    • The fortified rice is to be distributed under various government schemes, including the public distribution system (PDS) and midday meals in schools, by 2024.
    • The specifications for such rice have been issued by the Ministry of Consumer Affairs, Food and Public Distribution.
    • Department of Food and Public Distribution (DFPD) under Ministry of Consumer Affairs, Food and Public Distribution for the first time issued uniform specifications for Fortified Rice Kernels (FRK).

    What are the norms announced?

    • Common Rice have in case of procurement of Fortified Rice Stocks, of which 1% of FRK (w/w) should be blended with normal rice stock.
    • These specifications as per standard practice have been issued in respect of Paddy, Rice and other coarse grains namely Jowar, Bajra, Maize, Ragi.

    What is Fortification?

    • FSSAI defines fortification as “deliberately increasing the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health”.

    What is Fortified Rice?

    • Rice can be fortified by adding a micronutrient powder to the rice that adheres to the grains or spraying the surface of ordinary rice grains with a vitamin and mineral mix to form a protective coating.
    • Rice can also be extruded and shaped into partially precooked grain-like structures resembling rice grains, which can then be blended with natural polished rice.
    • Rice kernels can be fortified with several micronutrients, such as iron, folic acid, and other B-complex vitamins, vitamin A and zinc.
    • These fortified kernels are then mixed with normal rice in a 1:100 ratio, and distributed for consumption.

    Note: Biofortification is the process by which the nutritional quality of food crops is improved through agronomic practices, conventional plant breeding, or modern biotechnology. It differs from conventional fortification in that Biofortification aims to increase nutrient levels in crops during plant growth rather than through manual means during the processing of the crops.

    What is the plan announced by the PM?

    • Malnutrition and lack of essential nutrients in poor women and poor children pose major obstacles in their development.
    • In view of this, it has been decided that the government will fortify the rice given to the poor under its various schemes.
    • Be it the rice available at ration shops or the rice provided to children in their mid-day meals, the rice available through every scheme will be fortified by the year 2024.

    Why such a move?

    • The announcement is significant as the country has high levels of malnutrition among women and children.
    • According to the Food Ministry, every second woman in the country is anemic and every third child is stunted.
    • India ranks 94 out of 107 countries and is in the ‘serious hunger’ category on the Global Hunger Index (GHI).
    • Fortification of rice is a cost-effective and complementary strategy to increase vitamin and mineral content in diets.
    • According to the Food Ministry, seven countries have mandated rice fortification – the USA, Panama, Costa Rica, Nicaragua, Papua New Guinea, Philippines, and the Solomon Islands.

    Advantages offered

    • Health: Fortified staple foods will contain natural or near-natural levels of micro-nutrients, which may not necessarily be the case with supplements.
    • Taste: It provides nutrition without any change in the characteristics of food or the course of our meals.
    • Nutrition: If consumed on a regular and frequent basis, fortified foods will maintain body stores of nutrients more efficiently and more effectively than will intermittently supplement.
    • Economy: The overall costs of fortification are extremely low; the price increase is approximately 1 to 2 percent of the total food value.
    • Society: It upholds everyone’s right to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger

    Issues with fortified food

    • Against nature: Fortification and enrichment upset nature’s packaging. Our body does not absorb individual nutrients added to processed foods as efficiently compared to nutrients naturally occurring.
    • Bioavailability: Supplements added to foods are less bioavailable. Bioavailability refers to the proportion of a nutrient your body is able to absorb and use.
    • Immunity issues: They lack immune-boosting substances.
    • Over-nutrition: Fortified foods and supplements can pose specific risks for people who are taking prescription medications, including decreased absorption of other micro-nutrients, treatment failure, and increased mortality risk.

    Adhering to FSSAI standard

    The Food Safety and Standards Authority of India (FSSAI) sets standards for food items in the country.

    • According to FSSAI norms, 1 kg fortified rice will contain iron (28 mg-42.5 mg), folic acid (75-125 microgram), and Vitamin B-12 (0.75-1.25 microgram).
    • In addition, rice may also be fortified with micronutrients, singly or in combination, with zinc(10 mg-15 mg), Vitamin A (500-750 microgram RE), Vitamin B1 (1 mg-1.5 mg), Vitamin B2 (1.25 mg-1.75 mg), Vitamin B3 (12.5 mg-20 mg) and Vitamin B6 (1.5 mg-2.5 mg) per kg.

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  • PM announces Rice Fortification Plan

    PM in his I-day speech has announced the fortification of rice distributed under various government schemes, including the Public Distribution System (PDS) and mid-day meals in schools, by 2024.

    What is Fortification?

    • FSSAI defines fortification as “deliberately increasing the content of essential micronutrients in a food so as to improve the nutritional quality of food and to provide public health benefit with minimal risk to health”.

    What is Fortified Rice?

    • Rice can be fortified by adding a micronutrient powder to the rice that adheres to the grains or spraying the surface of ordinary rice grains with a vitamin and mineral mix to form a protective coating.
    • Rice can also be extruded and shaped into partially precooked grain-like structures resembling rice grains, which can then be blended with natural polished rice.
    • Rice kernels can be fortified with several micronutrients, such as iron, folic acid, and other B-complex vitamins, vitamin A and zinc.
    • These fortified kernels are then mixed with normal rice in a 1:100 ratio, and distributed for consumption.

    Note: Biofortification is the process by which the nutritional quality of food crops is improved through agronomic practices, conventional plant breeding, or modern biotechnology. It differs from conventional fortification in that Biofortification aims to increase nutrient levels in crops during plant growth rather than through manual means during the processing of the crops.

    What is the plan announced by the PM?

    • Malnutrition and lack of essential nutrients in poor women and poor children pose major obstacles in their development.
    • In view of this, it has been decided that the government will fortify the rice given to the poor under its various schemes.
    • Be it the rice available at ration shops or the rice provided to children in their mid-day meals, the rice available through every scheme will be fortified by the year 2024.

    Why such a move?

    • The announcement is significant as the country has high levels of malnutrition among women and children.
    • According to the Food Ministry, every second woman in the country is anemic and every third child is stunted.
    • India ranks 94 out of 107 countries and is in the ‘serious hunger’ category on the Global Hunger Index (GHI).
    • Fortification of rice is a cost-effective and complementary strategy to increase vitamin and mineral content in diets.
    • According to the Food Ministry, seven countries have mandated rice fortification – the USA, Panama, Costa Rica, Nicaragua, Papua New Guinea, Philippines, and the Solomon Islands.

    Advantages offered

    • Health: Fortified staple foods will contain natural or near-natural levels of micro-nutrients, which may not necessarily be the case with supplements.
    • Taste: It provides nutrition without any change in the characteristics of food or the course of our meals.
    • Nutrition: If consumed on a regular and frequent basis, fortified foods will maintain body stores of nutrients more efficiently and more effectively than will intermittently supplement.
    • Economy: The overall costs of fortification are extremely low; the price increase is approximately 1 to 2 percent of the total food value.
    • Society: It upholds everyone’s right to have access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger

    Issues with fortified food

    • Against nature: Fortification and enrichment upset nature’s packaging. Our body does not absorb individual nutrients added to processed foods as efficiently compared to nutrients naturally occurring.
    • Bioavailability: Supplements added to foods are less bioavailable. Bioavailability refers to the proportion of a nutrient your body is able to absorb and use.
    • Immunity issues: They lack immune-boosting substances.
    • Over-nutrition: Fortified foods and supplements can pose specific risks for people who are taking prescription medications, including decreased absorption of other micro-nutrients, treatment failure, and increased mortality risk.

    Adhering to FSSAI standard

    The Food Safety and Standards Authority of India (FSSAI) sets standards for food items in the country.

    • According to FSSAI norms, 1 kg fortified rice will contain iron (28 mg-42.5 mg), folic acid (75-125 microgram), and Vitamin B-12 (0.75-1.25 microgram).
    • In addition, rice may also be fortified with micronutrients, singly or in combination, with zinc(10 mg-15 mg), Vitamin A (500-750 microgram RE), Vitamin B1 (1 mg-1.5 mg), Vitamin B2 (1.25 mg-1.75 mg), Vitamin B3 (12.5 mg-20 mg) and Vitamin B6 (1.5 mg-2.5 mg) per kg.

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    Back2Basics: Public Distribution System (PDS)

    • The PDS is an Indian food Security System established under the Ministry of Consumer Affairs, Food, and Public Distribution.
    • PDS evolved as a system of management of scarcity through the distribution of food grains at affordable prices.
    • PDS is operated under the joint responsibility of the Central and State Governments.
    • The Central Government, through the Food Corporation of India (FCI), has assumed the responsibility for procurement, storage, transportation, and bulk allocation of food grains to the State Governments.
    • The operational responsibilities including allocation within the State, identification of eligible families, issue of Ration Cards and supervision of the functioning of FPSs etc., rest with the State Governments.
    • Under the PDS, presently the commodities namely wheat, rice, sugar, and kerosene are being allocated to the States/UTs for distribution.
    •  Some states/UTs also distribute additional items of mass consumption through PDS outlets such as pulses, edible oils, iodized salt, spices, etc.

    Mid-Day Meal Scheme

    • The Midday Meal Scheme is a school meal program in India designed to better the nutritional standing of school-age children nationwide.
    • It is a wholesome freshly-cooked lunch served to children in government and government-aided schools in India.
    • It supplies free lunches on working days for children in primary and upper primary classes in government, government-aided, local body, and alternate innovative education centers, Madarsa and Maqtabs.
    • The programme has undergone many changes since its launch in 1995.
    • The Midday Meal Scheme is covered by the National Food Security Act, 2013.

    The scheme aims to:

    1. avoid classroom hunger
    2. increase school enrolment
    3. increase school attendance
    4. improve socialization among castes
    5. address malnutrition
    6. empower women through employment