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Indian
Food Firms Must
Satisfy
Foreign Consumers'
Tastes
- Prof. Bruce M.
Chassy
Professor Bruce
M. Chassy, Executive
Associate Director
of the Biotechnological
Center at the University
of Illinois, USA,
during his recent
India visit, made
a presentation -
the Future of Food
and Agriculture
- at the American
Centre, Mumbai.
In a lucid and detailed
interview to Tripti
Chakravorty, he
talked about various
challenges the food
and allied industries
the world over and
especially those
in India have been
facing and the strategies
required to turn
them into opportunities.
Excerpts.
Modern agricultural
and food businesses
are at the cutting
edge of technology.
How can India stand
to gain from it?
According to the
UN Population Information
Network, 3-4 billion
people will be added
to the world's 6.5
billion inhabitants
in the next 25-30
years (1). The great
majority of this
growth will take
place in developing
countries such as
India. Most of the
world's land that
is suitable for
farming is already
being farmed; 11
percent of the land
surface of the globe
is dedicated to
agriculture (2).
We are, however,
losing farmed land
at the rate of 1.6
percent per annum
due to factors such
as urbanization,
desertification,
and loss of soil
fitness and fertility
(as for example,
salt build up in
irrigated soils).
One cannot overlook
the fact that 221
million Indians
are today undernourished
and hungry (3).
Perhaps 70 percent
of these are poor
farmers who cannot
presently grow enough
food each year to
feed their families.
Development leads
to demand for a
greater variety
of food and higher
quality food. The
more disposable
income individuals
have, they are more
likely to eat outside
their homes, or
consume packaged
prepared foods.
These changes are
usually accompanied
by a shift away
from preparation
of foods at home
using purchased
commodity ingredients,
commonly understood
as a shift away
from home-cooking.
The phenomenon leads
to a demand for
new and different
products from the
food industry. It
also happens that
more affluent consumers
tend to consume
more animal protein
in their diets.
The consequences
of a growing population
and increasing consumption
driven by rising
incomes will require
us to double the
world's food production
by 2025. This cannot
be done by putting
more land to the
plough, so it must
be accomplished
by increasing the
productivity of
each hectare of
land that we farm.
India is among quite
a number of developing
countries whose
agricultural yields
per hectare are
less well below
levels, can be optimally
achieved. That is
not to say that
India's best-farmed
fields are not as
productive as any
in the world India
has an abundance
of good farmland.
It is noteworthy
that globally, 1/3
or more of potential
crop yields are
lost to pests, disease,
suboptimal crop
nutrition and adverse
weather. Post-harvest
losses rob the world
of an additional
1/3 of the crop
yield. The silver
lining to this cloud
is that here is
obviously much room
for improvement
that will allow
us to engineer the
needed doubling
of world food supplies.
In recent years,
researchers have
used the tools of
biotechnology sometimes
called molecular
biology or recombinant
DNA technology to
produce improved
crop varieties.
It is possible to
introduce genes
that encode useful
and beneficial traits
using these genetic
engineering techniques.
These enhanced crops
are known to the
public as GMOs (Genetically
Modified Organisms).
Scientists call
them as transgenic
crops since all
of our crops are
already extensively
genetically modified.
Scientists see genetic
engineering as a
powerful addition
to the tools they
use to improve crop
plants. It has been
possible to produce
crop plants which
resist insects without
the use of pesticides,
weeds can now be
managed with environmentally
friendly pesticides,
and crops can resist
virus diseases.
BT-cotton is an
insect protected
cotton plant that
more than three
million Indian farmers
are now planting.
They find with these
transgenic cotton
varieties that they
get greatly increased
yields and profitability
in part because
they use little
or no pesticides
(which are not only
a major cost, an
environmental problem,
and often a heath
problem for farmers
who most work with
toxic pesticides).
Around the world,
transgenic cotton,
corn, soybean, and
oilseed rape have
been farmed on more
than one billion
hectares over the
last 12 years by
more than 10.5 billion
farmers (4). These
farmers have realized
significant increases
in productivity
per hectare and
have pocketed a
net total of $27
billion in added
profits (5). In
the near future,
crops that are resistant
to drought and heat
stress, crops which
require less fertilizer,
or which can grow
in salt water or
salty soils will
be introduced. Other
new varieties such
as Golden Rice will
provide better nutrition
for consumers especially
those who are malnourished.
Given the global
and local situation,
the need for increased
productivity in
agriculture, and
the rising demand
for food, it is
impossible to imagine
how India will meet
this challenge without
using all of the
best and newest
technologies. In
that regard, agricultural
biotechnology is
but one piece of
the puzzle. Far
from being a magic
bullet that will
solve all the ills
of agriculture,
it should be viewed
as one of many technologies
that must be brought
to bear on the problem.
In context, GMOs
can help us produce
more food in a more
environmentally
sustainable way.
Agricultural production
also needs a ready
availability of
water, an economical
way to provide soil
nutrients, good
roads and transportation
infrastructure,
easy access to inexpensive
credit for farmers,
good post-harvest
storage facilities,
and profitable markets
- among others.
The food and agricultural
system is a complex
interactive system
that will require
much attention and
improvement in the
coming decades,
and for which there
is no one quick
fix or remedy.
Indian food industry
is preparing for
a radical shift.
What are your views
on this?
My view is that
these changes are
inevitable. Historically,
as other countries
have undergone economic
development, their
food production
systems and marketplace
have radically evolved
as well. How these
evolve in India
will no doubt be
the result of uniquely
Indian resources,
Indian culture,
and Indian consumer
demand. In agrarian
societies there
are few packaged
food products available
to the consumer,
and often the availability
of a few simple
ingredients, fresh
fruits and vegetables
varies throughout
the year. The key
concept of change
in developing economies
is changing with
growing consumer
demand. For a consumer,
the market changes
from selecting between
a few available
products at an open
market, to walking
the aisles of a
supermarket lined
with 50,000 or more
products. Affluence
means that consumers
make far more choices
about food and can
begin to dictate
which will succeed
in the food marketplace
and which will fail.
For the food and
agriculture industries,
this means a change
from a supply driven
market to a consumer
driven market. The
new consumer expects
food to be safe,
to taste good, and
to be an enjoyable
experience - they
are no longer eating
simply to sustain
themselves. The
consumer is king
in the new food
market place.
The companies who
understand consumer
desires and provide
consumers with attractively
packaged, good tasting
products that are
safe, reliable and
easy to prepare
may do well if they
have also managed
raw material costs,
production costs,
training, regulatory
compliance, and
marketing. The real
winners will be
the companies who
bring consumers
new pleasures with
foods that they
never even realized
they wanted. It
must be stressed,
however, that the
single most important
attribute of food
is that it be safe
and nutritious.
The affluent consumer
demands safety and
wholesomeness. After
that consistency
and predictability
are a must. The
best of India's
food companies produce
outstanding products:
tasty, attractive,
safe, and consistent.
A sizeable portion
of the food marketed
in the country has
not yet achieved
those high standards.
Food borne illness,
contamination, and
inconsistent product
performance have
not been eliminated
from the Indian
food marketplace.
Consistent quality
demands warrant
a quality conscious
mindset, training
and a strong regulatory
system that promise
consumers safe and
wholesome food.
There are
astounding possibilities
in the business
of food at the international
level. One such
is the global pricing
which is higher
than the local/domestic
pricing levels.
How can India capitalize
on it?
There are several
key concepts. The
first is consistent
conformity with
internationally
accepted norms of
safety and quality
such as those embodied
in the ISO 9001,
ISO14000 and other
relevant ISO standards.
OECD and Codex Alimentarius
provide additional
guidelines. The
global food market
demands safe products;
increasingly, it
demands green products
made by environmentally
conscious companies.
The development
of a safety first
quality always mindset
that is backstopped
by a reputable food
safety regulatory
authority is essential.
These needs may
be met in the short
term by partnership
agreements in which
the buyer provides
in-country on-site
certification and
training. It is
also becoming increasingly
common for out of
country buyers to
inspect in-country
records and its
keeping and production.
The US Consulate
provides an interface
with US regulatory
requirements. Recently,
the FDA (Food and
Drug Administration
the US food regulatory
authority) opened
an office in China
to help Chinese
producers understand
the requirements
for food exports
to the US. The EU
has a similar interest
in assisting exporters
meet EU standards.
The need for quality
consistency, consistent
supply as well as
consistent performance
(taste, looks, texture,
dimensions, etc)
cannot be overstated.
Quality and safety
are attributes that
must be built into
the food production
system, they cannot
be added later.
They are also the
product of a corporate
culture that must
be developed and
sustained. Successful
food giants such
as Unilever, Nestle,
DANONE, and Kraft
have built this
cultural commitment
to excellence and
as a consequence
their products can
be found throughout
the world. Indian
companies that can
build a reputation
for safety, quality
and consistency
will prosper in
the world market
especially if they
can provide products
with a uniquely
Indian spin on them
that appeal to consumers,
and/or if these
products represent
a real value: low
cost, great performance.
The simple answer
to the question
is that Indian companies
that meet all the
expectations of
foreign consumers,
and do it at a lower
cost, will have
a bright future.
Those that provide
lower cost at the
expense of safety
or quality will
fall by the wayside.
Story of pricing
lies in Supply Chain
Management acting
as an intermediary
between producers
i.e. farmer and
end users. How do
you think this issue
can be resolved?
Frankly, I do not
think so. Globally,
there is a constant
tension between
agricultural producers
and supply chains.
Farmers always feel
their products are
undervalued. The
supply chain shops
around for the lowest
price. The greatest
portion of the assets,
revenues, and profits
in the food system
are in the hands
of the supply chains,
processors and retailers.
The farm revenues
are a small part
of the food system.
The power, therefore,
lies in the hands
of the buyer and
the supply chain.
As I said, I cannot
see this changing.
I am reminded of
what some have called
the Golden Rule
of Markets: he who
has the gold rules.
There is one exception
that is worth noting.
As I have said earlier,
quality, safety
and consistency
of supply are essential
to the downstream
manufacturers. Supply
chains in many countries
are increasingly
contracting with
farmers to grow
specific crops for
them in return for
a promise of guaranteed
income. This is
a win-win proposition
that ensures supply
for the system and
insulates the farmers
from a host of market
forces that are
largely outside
of their control.
I would call this
a trend.
Dietary habits are
increasingly western,
mainly in urban
India. How could
that be turned to
India's advantage?
One obvious advantage
to food companies
is that it may make
it possible to produce
some of the same
products for domestic
consumption as for
export. This is
not always the case,
however, since even
very similar products
need to be adapted
to local tastes.
The production of
Western products
also builds capacity
and know-how for
export markets.
Fusion products
that are Western
but which incorporate
typical Indian spices
and styles may also
be market opportunities.
From a nutritional
scientist's point
of view, this trend
to consume more
Western food may
not be the so desirable
if it means that
Indians will consume
more fat and refined
sugars. The traditional
Indian diet is a
reasonably healthy
one. Although it
is somewhat high
in carbohydrates,
the Indian diet
takes advantage
of health benefits
of fruits, vegetables,
pulses, seeds and
nuts to provide
consumers a diet
high in needed health
beneficial nutrients,
micronutrients and
fiber. It would
be unfortunate if
total dietary change
were to lead to
increased incidence
of high blood pressure
or cardiovascular
diseases that plague
Western consumers
who are just now
learning to eat
a healthier diet.
As is true for so
many things, moderation
is the key. If the
consumption of Western
foods that please
the palate is balanced
with a continued
intake of traditional
ingredients, the
Indian diet will
remain healthy and
will become more
varied and fun to
consume.
What are your opinions
on the recently
released India Food
Report 2008 and
Vision 2020?
I am not an expert
on India so I will
refer to their observations
and findings. I
emerged from a quick
read of them with
the sense that Indian
observers understand
the complexity and
diversity of food
issues confronting
the Indian subcontinent
and the large number
of factors that
must be managed
simultaneously.
India faces some
major production
challenges in the
coming years: sufficient
food, safe food,
healthy food.
Perhaps it will
come as no surprise
since I come from
an educational institution
that I believe education,
and particularly
education of women,
is the key to both,
development, controlling
birthrates and producing
enough food.
What are the environmental
impacts of our food
production systems?
How can they be
minimized?
We can all agree
on two things. The
first is that we
want to preserve
as much of the natural
environment that
remains as we can
and the second is
that we all want
enough food to eat.
In a very fundamental
way, these two are
sometimes at odds
with one another.
By this I mean,
that when we put
an hectare of wild
grassland or tropical
forest to the plough,
we loose an hectare
of natural biodiversity
that will never
be reclaimed. All
agriculture has
an impact of the
environment, but
yet, we must eat.
In recent years
the need to reduce
the environmental
footprint of agriculture
has come clearly
into focus. Agriculturists
are attempting to
reduce the use of
toxic chemicals
in agriculture,
to reduce greenhouse
gas emissions; water
loses and soil erosion,
among others. Not
only do policymakers
and the consuming
public demand reduction
in the environmental
impact of agriculture,
many educated farmers
have realized that
the very sustainability
of their livelihood
demands it.
One the major benefits
of the transgenic
plants that I spoke
of earlier is that
they directly reduce
the environmental
footprint and greenhouse
gas emissions from
agriculture. Brookes
and Barfoot, two
English economists,
have published a
peer-reviewed study
that documents the
benefits of the
first 10 years of
planting GMO crops
(5). The summary
of their paper says
it all:
“Genetically
modified (GM) crops
have been grown
commercially on
a substantial scale
for eleven years.
This paper updates
the assessment of
the impact this
technology is having
on global agriculture
from both economic
and environmental
perspectives. It
examines specific
global economic
impacts on farm
income and environmental
impacts associated
with pesticide usage
and greenhouse gas
(GHG) emissions
for each of the
countries where
GM crops have been
grown since 1996.
The analysis shows
that there have
been substantial
net economic benefits
at the farm level
amounting to $6.94
billion in 2006
and $33.8 billion
for the eleven-year
period (in nominal
terms). The technology
has reduced pesticide
spraying by 286
million kg and,
as a result, decreased
the environmental
impact associated
with herbicide and
insecticide use
on these crops by
15.4 percent. GM
technology has also
significantly reduced
the release of GHG
emissions from this
cropping area, which,
in 2006, was equivalent
to removing 6.56
million cars from
the roads.”
Somewhat inexplicably,
the world environmental
movement that is
represented by Civil
Organizations such
as Greenpeace, remains
steadfastly opposed
to GMOs. They see
GMOs as an extension
of what they call
industrial agriculture
and they blame that
kind of agriculture
for all sorts of
environmental degradation
almost without regard
to the necessity
to feed 6.5 billion
people. They advocate
a switch to organic
agriculture that
they claim is environmentally
friendly and sustainable.
It is not! Not only
does the body of
scientific evidence
not support their
assertion, it is
obvious at face
value that organic
agriculture is not
an alternative.
It is not sustainable,
it cannot produce
enough food to feed
1/3 of the world's
population, it is
less productive
per unit area which
is per se bad for
the environment,
it has other environmental
pitfalls, it emits
more greenhouse
gases, and in the
end the food is
not more safe of
nutrition than conventional
foods and is arguably
less safe than GMOs.
The facts are so
against organic
agriculture that
one wonders if Greenpeace
is a paid front
organization of
the organic merchants.
Upon careful examination,
Organic Agriculture
turns out to be
a chic fad for affluent
people who are too
far removed from
agriculture to understand
the issues, and
who can afford to
pay 2X or 3X as
much for food that
will feed their
illusions. But it
is a cruel hoax
to the world's hungry
who must watch precious
agricultural resources
wasted on folly.
It has been
estimated that the
future wars in the
world are going
to be on the depleting
levels of water.
What is your take
on this and what
effects it would
have on the food
industry worldwide?
This is a key question.
It is said that
much of the struggle
in the Middle East
for the last 60
years has been as
much about water
rights as land.
There is simply
not enough fresh
water in the world
and water resources
are falling rapidly.
Since agriculture
accounts for 70
percent of fresh
water use, the production
of food depends
directly on water
availability. Food
processing, food
preparation and
food service account
for an additional
10 percent of the
water use. And humans
need at least a
liter a day of water
to survive. It is
not an exaggeration
to say that water
is the stuff of
life. Little wonder
then that we see
water as a potential
source of conflict.
Although it may
not seem so at times
with Pakistani troops
firing daily across
the LOC in Kashmir,
or Russian and Georgian
troops facing off
in South Ossetia,
we live in a world
that is increasingly
turning away from
conflict and towards
collaboration. While
water resources
may remain contentious
for years to come,
we live on the water
planet. There is
no shortage of water,
the earth's surface
is 70 percent covered
with water, what
we are facing is
a short-term shortage
of fresh water.
A serious situation
but not an insurmountable
one. As noted above,
scientists have
developed drought-tolerant
transgenic plants
that need less water
and this, coupled
with improved productivity
per acre, will lower
the agricultural
demand for water.
More strikingly,
although rice alone
accounts for 50
percent of the world's
annual fresh water
usage, researchers
have developed systems
for dry rice production
that eliminate the
need for paddies
and require very
little water. Solar
and atomic powered
conversion of seawater
to fresh water is
also becoming an
economical reality.
With a progressive
biotechnological
policy in place,
why are Indian-made
innovations in biotech
products still not
globally received?
Although I am not
an expert with regard
to the actual Indian
situation and should
probably not answer
this question. I
am a food safety
expert, not a trade
economist, I would
imagine that there
remain structural
impediments to the
industry that could
include taxes and
over-regulation.
Biotechnology needs
a free market economy
and a robust commercial
infrastructure to
flourish. I don't
know if these are
the problems for
India but they are
elsewhere. I am
fairly certain that
it is not a lack
of trained people
or entrepreneurs;
there are plenty
of those in India.
As regards to the
global marketplace,
I can only point
out that it responds
to a good value
proposition. If
a supplier provides
good product and
favorable prices,
success should follow.
There is little
national bias in
today's international
markets when profit
is at stake.
Biotechnology is
still a sunrise
sector in India,
how can the US help?
There are 88,000
Indians studying
in American Universities
at this very moment,
many of them are
studying sciences
and engineering
(and marketing for
that matter) relevant
to biotechnology.
These kinds of numbers
have been true for
some time. Moreover,
Indian students,
and professional
NRIs have been part
of the biotechnology
revolution in the
US for the last
30 years. They collaborated
in much of the research,
staff our companies
and universities,
and their names
appear on patents
and product credits.
Many of them collaborate
with colleagues
in India, and others
have returned home
to spawn biotech
companies in India.
I am thinking, for
example, of people
like Dr. Anil Ghosh
in Kolkata, who
after working at
MIT in the US, returned
to India to found
a biotech company
and is now working
on developing a
biotechnology research
park in India. So
in point of fact,
Indians have been
a crucial part of
the development
of this science.
The US can help
by continuing to
do what it has always
done: participate
in training, collaborate
in research, partner
where there is opportunity,
and buy products
when the price it
right. I would like
to think that part
of that help could
take the form of
exchange of experts
such as myself,
and exchanges supported
by the recently
expanded India-US
Fulbright program,
that are supported
by the US Department
of State, the US
Embassy in New Delhi,
and our Consulate
here in Mumbai will
continue to add
value to Indian
Biotechnology efforts.
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