Food Processing Industry News From around the World.

Milk output up by 3.3 per cent in 2009-10


in a written reply to the Lok Sabha, minister of state for food & agriculture KV Thomas informed that the country’s milk production grew by 3.3 per cent in the last fiscal.

“Milk production in the country grew by 3.3 per cent to 112 million tonnes in 2009-10 fiscal as compared to 108.4 million tonnes in the previous fiscal,” Thomas said.

Throughout the last fiscal, major dairy players like Dwarka Milk, Mother Dairy and Amul have increased milk prices by around Rs 6 per litre to ensure that farmers are compensated for rising production costs.

The minister said the reduced availability and increase in price of fodder due to drought conditions in 2009 led to the increase in milk prices.

According to the agriculture ministry, during the last fiscal, the National Dairy Development Board (NDDB) had allowed the import of 30,000 tonnes of milk powder and 15,000 tonnes of butter with zero import duty to augment the availability of liquid milk and stabilise the price of milk in the domestic market.

“All state governments have been requested to exempt or reduce VAT on molasses and other cattle feed ingredients used in manufacturing cattle feed to reduce the cost,” Thomas added.

M’rashtra plans setting up of agri-processing clusters

The Maharashtra government is planning to give a boost the agro processing industry by adopting a separate agro-industrial policy for the state, which aims to attract new investments by offering of incentives and promotion of processing clusters. According to the draft policy document, the state government is looking at setting up agri-processing clusters for fruits, vegetables, cashew, cereals, pulses, oilseeds and dairy products. According to a report in Business Line, the document has indicated that clusters at 57 locations across the state could be set up.

Each cluster would have support infrastructure for producers and processors. It will promote availability of raw materials and other inputs, access support from the government, agriculture universities and research institutions, and would enhance access to market information. This would help farmers and processors to come together and offer higher value-added products.

For example, in districts such as Akola, Washim, Nagpur and Wardha, where soyabean is extensively cultivated, clusters could be set up for oil and solvent extraction units. Similar clusters could be set up for cashew nut growing districts such as Ratnagiri and Sindhudurg.

According to Azeez Khan, principal secretary, industries, the policy is aimed at creating all the forward and backward linkages in the value chain for farm products. Under the new policy multi-chambered cold storages would be promoted at various locations in the state. Currently, the National Horticulture Mission provides a credit-linked back-ended subsidy of 40% of the capital cost for cold storage units. For cold storages, the maximum capital cost permissible is Rs 6,000 /tonne for a 5,000 tonne capacity. In the case of multi-chambered cold storages, the capital cost could increase from Rs 6,000 / tonne to Rs 10,000 /tonne for a 5,000 tonne capacity.

Under the policy, the government will also provide a subsidy of 25% on the additional capital cost (over and above Rs 6,000 /tonne provided by the NHM, in order to encourage multi-product cold storages. For agri-processing units in the backward areas, the state government will give reimbursement of 50% of the net VAT paid during the fiscal. These units will also get 5% interest subsidy on term loans for fixed capital investment for five years.

Private Equity investors keen on food processing & agri business

Grant Thorton, an accounting and consulting firm, has found that major private equity (PE) investors are looking towards investing in the country's food processing and agriculture-based companies.

According to the firm, around $300 million has been invested during January-June this year. Last year, PE investments in these sectors were about $398 million. The comparative figures in 2008 and 2007 were $187 million and $4.3 million, respectively.

"PE players are attracted by greater professionalism and accountability, openness to outside investment, and fairly attractive valuations of these companies," CG Srividya, partner, specialist advisory services, Grant Thorton, told Business Standard.

According to the industry estimates, PE investors prefer taking about 20 per cent and more in a firm to participate in its growth story.

Karnataka Horticulture Dept to invest Rs 50 lakh for minor fruit promotion scheme

Karnataka horticulture department has allocated Rs 50 lakh for the promotion of minor fruits which include pommelo, cheriymoyer and butter fruit.

The state government has opened the Pommelo Conservation Centre in Bangalore at Devanahalli and is already collecting various types of pommelo including the Devanahalli variety and other new types. They are also educating farmers about the good varieties and the commercial viability of the fruit.The officials at the department said that several farmers in Gauribindanur, Bidadi had taken up cultivation of pommelos in tracts of big area.

We are now working with the farmers to help grow these fruits which have been identified going by the market potential, stated S V Hittalmani, additional director of fruits, horticulture department.

The department has launched a minor fruits promotion scheme which will take off in 20 out of the 30 districts in the state. The farmers will be given planting material to farmers worth Rs 2500.

One of the fruit, pommelo, which was introduced by the Britishers in 1830 is not a native plant of India, according to the horticulture department officials.

Nearly 20 types of pommelos are being cultivated. The minor fruits and pommelo have significant medicinal value and can be grown in the state owing to its agro climatic conditions. There is a possibility of making a health drink out of pommelo which can also be a good avenue felt the horticulture department.

The department of horticulture is now trying to revive the pommelo fruits, the focus area being Devanahalli in Bangalore.

Indian Institute of Horticulture Research is also doing extensive research on pommelo and has procured varieties of the fruit from the USA, Taiwan, Israel and Europe.

Why subsidised food to APL families, SC asks Govt

The Supreme Court on Tuesday asked the Centre why it cannot stop the PDS facilities to the above poverty line (APL) families. An apex court bench asked the government to respond to this query within six weeks. The court observed that if the existing subsidy was withdrawn from the APL families, there would be enough food grains for the BPL category.

A bench comprising justices Dalveer Bhandari and Deepak Verma sought the views of the government while hearing a case based on a report submitted by justice D P Wadhwa committee that unearthed corruption in the working of the PDS and largescale pilferage of grains in states. The committee also found that 90% of kerosene was not reaching the intended beneficiary. “The general complaint is that people in the BPL category do not get the intended benefits under the PDS because people in the APL category are also entitled to grain under the PDS. It is, therefore, desirable that people in the APL category should not get the PDS benefit and the entire benefit be extended to the BPL category,” the bench observed.

The court also wanted to know the views of the National Advisory Council (NAC) on the subject. The bench asked the additional solicitor-general Mohan Parasaran to find out from the Centre whether it agreed with the suggestion of the NAC for declaring 150 districts poor and extend the BPL scheme of the PDS to every household in these districts.

The court took exception to the reports that food grains were rotting in Food Corporation of India (FCI) godowns for lack of space and directed release of the grains to the needy. “Not a single grain of food should be wasted. In a country where people are starving and the official statement of the government indicates that there is shortage of food at many places, how can the grain be allowed to rot in FCI godowns,” the bench asked.

It ordered the government to adopt suitable storage mechanism or release the grains to the needy. On corruption and pilferage in the PDS, the court asked the Centre why it was not transporting grains directly from the FCI godowns to ration shops instead of routing them through intermediaries. It also suggested that grains be stored in government godowns rather than private warehouses. On a short-term basis the government could consider hiring private warehouses or putting up waterproof tents to save the grain. But all-out effort must be made to ensure that not a single grain was wasted, it said.

The court said the whole PDS should be computerized to avoid pilferage and corruption and the system should be linked to the Unique Identification Authority (UID) of India and fair price shops should be operated by government bodies instead of private agencies to check corruption and pilferage in the existing system.

It also reminded the states about its June 10, 2008, order by which it had increased the ration for the BPL families from 25 to 35 kg per month per family, and wondered as to how the government limit grain allocation without taking into account the size of the families. “How is it that a family which has two members get the same quantity of grain that is given to another family of eight members,” the bench asked.

Govt in conflict with SC suggestion on food security Bill

The government has said that it had not yet made up its mind on the Supreme Court's suggestion to discontinue providing subsidised foodgrains to families above poverty line (APL). "The main issue, which I have read from newspapers, is what is the government's view on subsidised foodgrains to APL. Of course, we have not taken any view yet," said minister of food and public distribution Sharad Pawar.

The apex court had, on July 27, suggested that the government to consider discontinuing supply of subsidised grains to APL families and, instead, restrict the facility to those below poverty line in view of growing corruption and loopholes in the existing Public Distribution System.

"The Supreme Court has sought our reaction. We haven't taken any view," Pawar said.

Stating that the President of India had spoken about the Food Security Bill during her address at the joint Parliament session, Pawar said she had only made a mention about providing subsidised food at Rs 3 per kg of rice and wheat for below poverty line families.

"On that line, ultimately we have to take a final view," he added.

Pawar said that his ministry was expecting suggestions from the National Advisory Council on the issue, and would discuss the matter with representatives of state governments and the ministries concerned.

"Then, the (Food) ministry would take some definite view and come before parliament," he said.

"From our side, we have discussed the issue with food secretaries from different states. We have also got some views from different ministries. But, we are just waiting for some other suggestions," Pawar added.

Final call to comment on FSSA draft

Food & beverage experts and panelists of the Food Safety & Standard Authority of India (Fssai) have asked industry professionals to go through 630 pages of "draft regulation" document under the FSSA Act 2006.

Speaking at the Functional Food & Beverage (FF&B) 2010 conference, Dr DB Anantha Narayana, director (technical regulatory South Asia Foods), Hindustan Unilever, and panel member for functional foods, nutraceuticals, dietetic products and other similar product of Fssai, has asked industry professionals to comment on the draft regulation, expressly Section 22 which defines various food items like functional foods.

The new draft was published in June 2010 with 60 days period to comment on it. "We have a few weeks time to comment on the draft regulation. Instead of blaming the government and the Authority for putting old wine in new bottle, we should thoroughly read, comment and ask the Fssai to update the food laws," Narayana said.

Currently there are about nine major food laws and other indirect regulations which are being followed by the industry.

The 9 different food laws are -- the Prevention of Food Adulteration Act, Fruit Products Order, Meat Food Products Order, Vegetable Oil Products (Control) Order, Edible Oils Packaging (Regulation) Order, Solvent Extracted Oil; De oiled Meal, and Edible Flour (Control) Order, Milk and Milk Products Order, and Essential Commodities Act, Infant Milk Substitute, Feeding Bottles and Infant Foods Act.

Giving an example of the US food industry, where millions of people communicated with President Barack Obama through letters, mails etc. and asked him to bring dietary supplements and food under regulation, Narayana said, "We can replicate a similar story here as well. "Whether you like the regulation or not, whether you criticise it or appreciate it, make sure that you read the regulation and comment on it. Once it comes into force it would be tough to amend it at least for 5-7 years," he said.

Informing about the new draft, he said the licensing system, self-regulatory code, ASCI, mandatory registration, and pre-market approval for claims would remain in the new law.

Prabodh Halde, head, PIM Marico Ltd, and secretary of the Association of Food Scientists and Technologists (Afsti), said, "We have around one-and-a-half months time to see the final draft regulation and a few weeks more to comment on it. We as an f&b industry specialists, value Fssai's move and seek to comment and provide our viewpoint to the Authority."

Along with the FSSA draft regulation, Fssai had also unveiled a few consultation and concept papers on the food categorisation system, additives, foods for special nutritional purposes, revised draft regulation of trans fatty acids, partially hydrogenated vegetarian oils, a revised draft on energy drinks and caffeine, and a draft on operationalising the regulation of GM foods in India.

The new draft regulation has adopted Codex guidelines for nutritional, health, comparative and disease reduction claims in the processed food items.

The Authority has also drafted regulations for ayurvedic claims. The new FSSA draft encompasses Ayurveda, Unani or Siddha for health supplement, cosmetics and extracts which would help sell food products with ayurvedic ingredients and claims.

Lalitha R Gowda, head, food safety and analytical quality control department, Cftri, said, "The Indian food processing industry is moving up with new concepts like globalisation, convenience foods, awareness and very importantly food safety. To ensure that our food products are safe, we would have to put our norms aptly. Hence, we must look forward to sharing our views, suggestions with the food Authority."

Food security law could double subsidy bill: Pawar

The country's food subsidy bill could nearly double to Rs 1,07,381 crore if the government decided to supply 35 kg of food grains at cheaper rates to to the poor under the proposed Food Security Act. In the 2010-11 Union Budget, the government had estimated the food subsidy at Rs 55,578 crore. "Taking 2011 population figures, an average family size of 5.5 and 37.2% poverty estimates, the annual subsidy required for all the beneficiaries at 35 kg per family per month would be Rs 1,07,381 crore," food and agriculture minister Sharad Pawar informed parliament on Friday.

The cost of supplying 25 kg per family would be Rs 76,719 crore, he said. The total amount the government was going to spend under the proposed Act would depend on several factors such as economic cost, Central issue prices, categories of beneficiaries and the scale of issue of essential commodities, he added.

Though the draft Food Security Bill was cleared in March, it is yet to finalized as the government is still working on fixing the quantity of grains to be supplied and the number of beneficiaries to be covered under the Act. At present the government recognises 6.52 crore BPL families.

As misleading ads come under govt scrutiny, Complan gets the first jolt

Maharashtra FDA has finally put the ignition key. The first case of misleading advertisement has been lodged by the Association in its 40-year career, on a lead given by a government appointed body Acash ( Association for Consumers Action on Safety & Health).

"FDA has booked Complan for a misleading advertisement claim contravening the advertisement law under section 37 & 39 of the Prevention of Food Adulteration Act ( 1956), "says FDA Maharashtra joint commissioner C B Pawar. The case is pending in the Mazgaon court in Mumbai.

Acash is an independent non-profit organisation formed to deal with health - related consumer issues. It was founded by a group of doctors, lawyers and other concerned individuals in 1986. Acash is also known for the cases lodged by it against names like Nestle, Johnson& Johnson and Wockhardt for similar violations.

With this a signal is sent down to other F & B companies to take make the precautionary corrections before FDA tightens its noose on them.

Heinz, the maker of Complan, has been advertising its product claiming that regular consumption of Complan in milk increases the height of a kid by 3 inches.

The company claims that the claim was based on a study conducted on 900 children from different backgrounds in the age group of 7-12, that proved that children who drank Complan along with a regular diet grew faster compared to those who had only a regular diet.

Says R K Anand, founder president, Acash, and the man behind the movement, "Some parents drew my attention to an ad in which a mother is upset that her son is often teased about being short. The child is called a "half ticket" by his friends in the ad. Then the child starts having Complan and he starts to become taller."

The advertisement does not only imply discrimination against students who are short in height but also brings the nutritional claim under scrutiny.

Shoppers prefer Kirana Shops to Malls, says ASSOCHAM

Kirana stores and local retailers would remain the most preferred destinations for majority of the shoppers across the country as compared to sprawling shopping malls as they provide for cheaper purchases to an extent of 25% and also offer options for avoidance of payment of duties such as VAT and other local levies on articles sold by them.

This are results of a country-wide survey done under the aegis of ASSOCHAM Social Development Foundation, the industry body ASSOCHAM (Associated Chambers of Commerce) informs. According to that survey, it was discovered that goods disposed of by the malls are devoid of these twin benefits and thus attract only the upmarket buyers.

Kirana stores are small traditional mom-and-pop stores located always near to or within housing areas.

The survey completed in a span of two months i.e., March-April 2010 randomly taking a view of buyers in 15 major cities including those in metros, also discloses that it is a myth that malls and shopping complexes store sustained quality products as it is available in kirana shops along with other retail establishments in abundance and that too for a negotiable price. In contrast, the survey also reveals that mall culture is becoming a little pervasive in sub-urban cities of Ghaziabad, Gurgaon, Noida, Faridabad, Navi Mumbai etc. and the fact would remain that customers in such places get disillusioned very shortly due to wide gaps in margins and lack of availability of cheaper products.

According to ASSOCHAM, malls only entertain the shoppers and make a big hole in the shoppers’ pocket, while in case of retail shops consumers, have the satisfaction of scanning through major brands and products for which prices are generally found to be negotiable, said ASSOCHAM Secretary General, Mr. D S Rawat when releasing the findings in New Delhi.

The survey of the apex chambers suggests that the mall culture has not been able to shift the focus entirely away from local traditional markets as the shoppers prefer to hangout and shop there, more so because of the familiarity with ambiance, ease of access, variety of goods, early opening and late closing times etc. which suits to the local residents.

A compulsion to take the cash memo for every purchase made in malls is another aspect that puts off the shoppers. It is generally perceived that malls only provide different range and variety in branded stuff, it is nothing but a paradoxical mindset as in reality it is observed that well-established retail outlets not only provide affordable brands but also have abundant variety of products with significant reduction in margin.

Cities covered by the survey include Delhi, Kolkata, Chennai, Bangalore, Mumbai, Hyderabad, Pune, Ahemdabad, Lucknow, Patna, Bhopal, Nagpur, Kanpur, Jaipur, Ludhiana. Nearly 5000 shoppers across these cities were interviewed by ASSOCHAM team as their preferences for opting from kirana shops and those of malls.