Retail FDI, a game-changer

Needless middlemen in the mandis will be eliminated. — Sushil Kumar Verma

Farmers, consumers and small entrepreneurs stand to benefit from supply efficiencies.

The announcement on notifying 100 per cent FDI in single brand retail, and opening up multi-brand retail to FDI is a welcome move, and sparks hopes of restoring investor confidence and attracting more funds from overseas. It is worth reiterating the benefits expected from this move.

The arguments against FDI in multi-brand retail range from fear of local kiranas being wiped out, to farmers being exploited or use of monopolistic practices.

But several studies have emphasised that FDI in multi-brand retailing would boost the organised retail sector, with a positive impact on stakeholders, including producers, workers, employees and consumers. The fund inflow and technology from overseas would help bring in greater efficiencies down the supply chain.

LOWER PRICES

A more efficient farmer-to-consumer chain would reduce prices for the final consumer. In addition, quality of goods would improve with shorter time taken to reach the final consumer. It is also expected that food safety standards would improve with better testing and aggregation facilities.

The consumer would also benefit from the wide choice that a large multi-brand retailer can afford. The fear of predatory pricing by large retailers, Walmart, Tesco or Carrefour, is misplaced, considering the competition from multiple players. The government has also recently constituted the Competition Commission precisely to check unhealthy practices.

FARMER TO BENEFIT

The second beneficiary of FDI in the retail sector would be the farmer and producer whose price realisation would increase substantially through the organised retail sector.

According to a recent report by CII and Boston Consulting Group, an Indian farmer of tomatoes earns 30 per cent or less of the final price whereas in the developed countries, the farmer can receive as much as 70 per cent.

Further, technology and inputs would provide the farmer much-needed opportunities for growth.

A significant portion of the mark-up is on account of the existence of a large number of intermediaries with multiple margin payouts. So far, little investment has come for supply chain infrastructure such as cold storage, warehouses or refrigerated transport, with the result that as much as 40 per cent of agricultural produce may be spoilt or wasted.

Organised retail would help reduce wastage, adding to food security. Similarly, needless middlemen in the mandis, which are often known to promote cartelisation, would have to look for other employment.

ADVANTAGES FOR SMEs

Third, even the non-farming sector, particularly the small manufacturer, would reap the advantages that modern retail provides.

These small players currently do not enjoy scale and distribution network to cover the market. With the entry of organised retail, SMEs would be able to go in for bulk production with guaranteed absorption of their product.

In addition, with quality becoming the main consideration, the SMEs would have to invest in modernisation and upgradation leading to a better product for the consumer, the end beneficiary.

A recent study on the impact of organised retailing on the unorganised sector by the Indian Council for Research on International Relations (ICRIER) did not show any evidence of a downtrend in employment following the entry of organised retailers.

Instead, the study said, small retailers evolve as they add new product lines and brands, go for better displays, renovation of stores, introduction of self-service, and more credit sales and acceptance of credit cards.

It is also not uncommon to hear about local kirana stores being wiped out as a result of organised retail. But against the total retail business worth billions of dollars, the present cash-and-carry retail chains account for a market share of only about seven per cent.

In the case of Metro Cash and Carry outlets, the kirana operator benefits from sourcing his products from the German MNC at a much cheaper price. Similarly, today, corporate retailers, the kirana merchant and the local vegetable vendor co-exist side by side, with the ultimate beneficiary being the consumer.

EMPLOYMENT CREATION

Finally, in terms of employment, it is expected that organised retail would generate over four million new direct jobs which would earn an incremental income of 15-30 per cent over other alternatives.

As many as six million new jobs would be created in the infrastructure segment with logistics, packaging, housekeeping and security. Most of these are expected to come in from the back-end in rural areas.

The total retail market, according to the CII-BCG study is projected at $1,250 billion by 2020 based on macro economic factors including GDP growth, private consumption growth and mix of goods and services. Currently, organised retail trade in the country is estimated at $28 billion, just about 6-7 per cent of the total retail market. This is expected to shoot up to $ 260 billion by 2020.

Even then, organised retail would be just about one-fifth of the total market, the rest being covered by local stores. Organised retail would extend to food and beverages, clothing and accessories, electronics and appliances, furniture, health and personal care in addition to food services and sporting goods.

Thus, the new policy announcement can be expected to be a game-changer for India’s retail sector. The Government has undertaken multiple stakeholder consultations in working out the details of inviting FDI in retail, both single-brand and multi-brand.

The resulting stipulations are prudent and designed to encourage investments in the supply chain as well as add jobs. In particular, rural areas would benefit from stronger connectivities to the urban markets.

(The author is Director-General, CII.)

DAILY THANTHI NEWS

Corpn to keep an eye on water supply Inspection Of Private Tankers Shows Chlorine Content In Water Is Low

Chennai: The Chennai Corporation and the food safety department have identified 15 places in Tiruvallur and Kancheepuram districts from where water is drawn from bore wells and open tanks by private tankers and supplied in the city. Soon, a joint squad of the revenue, health and police departments will inspect other water sources being exploited in these districts.
    Medavakkam, Padur, Nanmangalam, Keelkattalai and Kovilanchery in Kancheepuram and Poonamallee, Chenerkuppam, Veetalathottam, Alapakkam, Padianallur and Red Hills in Tiruvallur are among the places identified after two migrant workers died in Pallikaranai after drinking water supplied by a private tanker. About 107 private water tankers across the city were inspected since September 5 and it was found that the chlorine content in the water was very low.
    All is not well with Metrowater tanker lorries, too, with officials finding that chlorine content in the water in seven lorries was very low. A senior Metrowater official said: “Some tankers are operated on a contract basis and there is a chance of contamination due to the lack of cleanliness. We will initiate frequent raids to ensure water is fit for consumption.”
    A senior corporation official said: “Several private tanker firms supply water drawn from neighbouring districts and the chlorine content is low in water in most of the seized lorries. We have added chlorine to water in some of the lorries.”
    Other officials said staff shortage was affecting the raids and that mushrooming private water tanker firms were compounding the problem. “It’s difficult to conduct raids every day. So we decided to trace the sources of these firms in the two neighbouring districts” said an official. He said the collected samples would be sent to analysts in the public health department. “If there is any problem, action will be initiated against these firms,” he said.
    Sources said private water tankers supplied to hotels, apartment complexes, hospitals as well as to construction sites and that complaints were pouring in that most of these tankers were drawing water from bore wells and open tanks without any purification. Drinking water samples should have a minimum chlorine level of 0.2 parts per million (ppm), but most of the water sourced from bore wells and open wells rarely met the standards, they said.
    On the other hand, many residents in the city said they didn’t have an alternative. “There is no regular supply by Metrowater. So we have to depend on private lorries for our daily needs,” said a resident in Ambattur. The colour and smell of water supplied by private tankers were different but they had no option, he said.

Crackdown on junk food in canteens

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Crackdown on junk food in canteens

Students might have to go back to eating mummy ke haath ke paranthe in school if the Centre's ban on junk food in canteens is implemented.

Carrying that lunch box to school, the insides of which are slowly turning pale yellow, is so, so not cool - at least that's what Delhi's school kids think. And with chips, patties and plates of hot spring rolls drawing you to the school canteen, who wants to sit in class during break and eat the paranthas your mom packed for you early morning? However, if the Centre's attempt to ban junk food in school canteens is successful, the wide range of goodies available across that counter may soon become a thing of the past. Here's what the students have to say about the 'canteen stuff'...

For me, the most un-cool thing you can do is carry a lunch box to school. I would do it when I was a kid, but now that I am in senior school, I'd rather hang out with my friends in the canteen during lunch break and buy food from there; stuff like patties, chips and a soft drink.
- Sahaj Bhadwar* DPS (Mathura Road).

I like ghar ka khana, but it's embarrassing to carry a tiffin box to school. I end up eating from others' lunch boxes and from the canteen as well. So, I get the best of both. The spring rolls in my school canteen are really good; I usually eat that and get myself a juice along with that.
- Abhishek Sharma , Class XI, DPS (Dwarka).

Sometimes, it's difficult for my mom to wake up earlier than usual just to pack me some food for school, so she gives me some money instead. I buy myself something to eat from the canteen in school. On days when I'm not too hungry, I get myself a soft drink and a packet of chips, and on the rest of the days, rolls are a good option.
- Shikhar Mathur, Class X, DPS (Dwarka).

I'm not really for carrying a lunch box to school and our school canteen isn't all that great either. So I carry an apple or something from home and maybe buy myself a packet of chips or a patty from the canteen and I'm fine with just that. I can wait to eat proper khana once I get home.
- Shraddha Kochchar, Class XI, Modern School.

Our canteen guy changed recently. Earlier we used to pig out on samosas, patties and other fried stuff, but now there are healthy options available in school. We get sandwiches, boiled veggies, etc, and instead of fizzy drinks, there is juice and milk. I'm glad about this, because had we continued eating all that fried food, we'd be heading the American way as far as junk food consumption goes.
- Anuj Ahlawat, Class XII, Navy Children's School.

Lunch time favourites
Spring rolls
Chips
Patties
Samosas
Chicken rolls

Official speak
About the junk food ban, Preeti Agnihotri, official spokesperson for FSSAI (Food Safety and Standards Authority of India) said, "We have initiated this idea to ban junk food in schools in India and the AC Nielsen Company for Development of Guidelines is helping us frame the guidelines. It is due to a concern about the children's health. The process is still underway and we'll implement it once the guidelines are set. Once it's implemented, we intend monitoring it closely."

Food joints told to get registered

Amritsar, September 15
The Health Department has issued fresh instructions to all food joints in the city to get them registered and obtain licences under the Food Safety Act. The department convened a meeting of owners of hotels, restaurants, and representatives of the Halwai Union to pass on the message.
The instructions were issued under the Food Safety and Standards Act 2006, which became operational in the state after August 8, 2011.
Civil Surgeon Dr Yash Mitra said it had been seen that not all food businesses had shown interest in getting these registered or obtaining licences as per the law.
“Those who have still not followed the orders have been asked to do so at the earliest. If the businesses failed to respond now, strict action would be initiated.”
District Health Officer Dr Shivkaran Singh Kahlon said all food businesses, including temporary stalls and karyana stores selling food ingredients, were required to register themselves.
“The food businesses with an annual turnover of up to Rs 12 lakh are required to register, while those establishments with annual turnover exceeding Rs 12 lakh are required to obtain a licence,” said Kahlon.
The guidelines are also binding on those distributing foods at religious or social gatherings. Even those engaged in the activities related to manufacture, processing, packaging, storage, transportation, distribution, import, catering are required to get registered or obtain licences as per the procedure.
Kahlon said, “The waiters and cooks working at all these eateries would also be asked to submit their medical examination reports. This is in view of several diseases that might be transmitted to the people eating at these places.”

Indians want their fix of gutkha & pan masala despite ban

It’s not without reason that India tops the list of smokeless tobacco users in the world with nearly 83 per cent consumers. Indians are so addicted to flavoured tobacco — pan masala and gutkha to be precise — that despite the ban on its manufacture and sale in 11 states so far, consumers are still getting hold of their daily fix, courtesy contraband sales.

The ban in Delhi and 10 other states including Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh, Mizoram, Kerala and Bihar, among others, has resulted in black marketing of the product. This has impacted price, which has gone up significantly.

Consider this: A sachet of branded pan masala such as Rajnigandha (from Delhi-based DS Group) and Manikchand (from Pune-based Dhariwal Group) has almost doubled to Rs 15 from Rs 8 in the last two months. Local brands that cost Rs 2 are now available for Rs 5, while gutkha is available for Rs 3 from Rs 2 earlier.

Local retailers in cities such as Mumbai and Delhi, where there is strict enforcement of the ban, say that prices will continue to climb. "I don't see prices coming down any time soon if there continues to be strict enforcement," says a pan shop owner in central Mumbai. For instance, gutkha prices are likely to climb to Rs 5 from Rs 3 now, some shop owners in Delhi and Mumbai say.

While retailers do not display the product for fear of being caught by the authorities, consumers in search of their fix rarely go home disappointed. A shop owner in Delhi, for instance, says that he continues to sell around 2000-2,500 packs of gutkha per day. "More than half my customers are regular. So even if there's a ban, I am not worried," he says.

But not everybody seems happy with the order pronounced by the 11 states so far. Players such as the Dhariwal Group have moved court challenging the ban on flavoured tobacco in Maharashtra. Company officials while choosing not to come on record say that pan masala and gutkha cannot be considered as food products. That way, they argue, these products will not be governed by the Food Safety & Standards Authority of India (FSSAI).

Maharashtra had issued the ban on gutkha and pan masala this July under the Food Safety & Standards Act of 2006 on the grounds that these products when consumed were injurious to health. The notification issued by the state had said that paan masala contained chemicals such as magnesium carbonate, while gutkha contained chemicals such as zinc among others. These chemicals are said to be cancer-causing.

But the fact remains that the gutkha and pan masala industry in India is huge pegged at anywhere between Rs 15,000 to Rs 20,000 crore. There is also a tax impact as a result of the ban.

At the time of pronouncing the ban, Maharashtra deputy chief minister Ajit Pawar had said that the state would lose Rs 100 crore in tax from gutkha and pan masala. Interestingly, Maharashtra tops tobacco consumption in India with 43 per cent adult men and 19 per cent women addicted to it, according to the Global Tobacco survey. The survey also pointed out that around 3.82 crore people consume gutkha in India.

Beetelnut growers suffer due to ban

While players lobby hard for the ban on gutkha and paan masala to be reversed, a key argument that they present is the impact on betelnut or aracanut growers. Arecanut is produced in two varieties — red and white. The red variety is the most preferred in the manufacture of gutkha, while the white variety is used for consumption of pan.

Thanks to the ban on gutkha, the consumption of the red variety of aracanut has taken a hit. Prices are down by about three per cent to Rs 134 in major markets such as Karnataka and Kerala.

According to A S Bhat, former MD of the Central Arecanut and Cocoa Marketing and Processing Cooperative Ltd (Campco), the arecanut trade contributes about Rs 4,000 crore to Rs 5,000 crore annually to state and Central exchequers by way of VAT, Central Excise and Customs duty.

Chronicle of a ban retold - THE HINDU

Madhya Pradesh stands out as the best model of implementing gutka ban. This is the result of administrative will coupled with political and public action

The implementation of the Food Safety and Standards Authority of India (FSSAI) notification 2011 that effectively prohibits the production, sale, and consumption of gutka products containing tobacco and nicotine is one of the landmark public health interventions in Madhya Pradesh in recent years. In a country where 90% oral cancers are directly related to use of smokeless tobacco, the State-level intervention that Madhya Pradesh has initiated is of high importance for two apparent reasons. First, this has undone the previous history (also the myth, of an impractical ban!) of 2001 that failed to sustain the ban due to various pressures including that of judiciary and industrial lobbies. Secondly, the current move has provided momentum to the action against gutka and pan masala all over the country. , After Madhya Pradesh imposed gutka ban, Kerala, Bihar, Maharashtra, Rajasthan, Jharkhand, Chhattisgarh, and Haryana followed suit.

The health challenges of the gutka products have long been a concern for public health activists and people. In India, the consumption of gutka is widespread and this outnumbers any other form of tobacco use. As per the Global Adult Tobacco Survey India 2010, 75% of the current 275 million tobacco users consume gutka. Because of easy availability, low prices and the attractive marketing, gutka products have gained popularity among schoolgoing children and adolescents over the years. As per the Global Youth Tobacco Survey India Report, 2006 the use of gutka is 10% among the boys and 5.5% among girls of schoolgoing age. The National Institute of Health & Family Welfare in its fact-finding report mentions of 3,028 chemical ingredients in gutka products. Of these, 28 chemical ingredients are proven carcinogens! As per the study of Indian Council of Medical Research, 70,261 people were detected with cancer of the mouth, tongue and hypo pharynx in 2010 because of “smokeless tobacco products.” The numbers of those affected have been steadily rising from 2008.

Madhya Pradesh stands out as the best model of implementing gutka ban and this is importantly, the result of administrative will coupled with political and public action. The need for enforcement primarily originated from the high levels of gutka consumption in the State. The State developed an initial plan of action under the leadership of the then Food Commissioner, and implemented the plan rigorously by ensuring the support of district administrations, the general public and the media. As of July 2012, approximately 50 raids were conducted and four million pouches confiscated.

The implementation has evidently succeeded to curtail both the supply and the demand for gutka in the State. The enforcement of ban is widely discussed and appreciated en masse. Now, rampant use is reduced. Access is considerably reduced for casual users, children and women. Retailers had a loss of 50% turnover in the last four months after the ban and most importantly all the 16 registered factories were sealed to close. Certainly, blackmarketing exists through cross-border smuggling but the wide reach of the supply chain is shattered by the ban and subsequent administrative actions.

However, one of the major drawbacks is the lack of adequate cessation facilities in the State. In the absence of such facilities, gutka users may switch to other products that are cheap but equally harmful.

However, what is important now is to sustain the fight through continuous monitoring of implementation systems with coordinated inter-State/district activities. Further to this, the experience of Madhya Pradesh and other States should inform the National Tobacco Control Programme of India in order to extend the best practices across the country. This would surely provide a great leap forward to the tobacco control initiatives.

Go Guthka, Go

Use of smokeless tobacco in the form of guthka, pan masala etc has of late picked up in Jammu and Kashmir. Along with cigarettes, tobacco in other form is easily accessible to all age groups including young adolescents. The new trend of using chewing tobacco is becoming a major problem. As per A M Mir, Executive Director, J&K Voluntary Health and Developmental Association, an NGO involved in the advocacy for implementation of tobacco control legislation in Jammu & Kashmir, “There is an alarming rise in the human loss due to abundant use of tobacco, both smoke and smokeless forms. However, the trend of using the smokeless form of tobacco (Guthka, Khaini etc) is gaining ground and so is the usage of overall tobacco products”. This fact can be easily substantiated by the figures provided by the department of commercial taxes government of Jammu and Kashmir to a social activist Saleem Malik. According to a department reply to an RTI filed by Malik, the tax collected for 2009-10 was 6305.57 lakh, 8584.47 lakh for 2010-2011 and 17418.65 lakh for 2011-2012.  This is without the tax amount of Rs 20 crore lost by the state due to smuggled cigarettes. The brand wise import of tobacco products and taxes collected is not maintained by the sales tax.
Smokeless form of tobacco especially Guthka is new to Jammu & Kashmir, it is mostly consumed by the migratory labor population coming from other states like UP, Bihar, Jharkhand etc. The product is very cheap and is easily available even in the most remote villages of the state. Over, the last two decades as the substance abuse has became wide spread in state and even the boot polish is being consumed by the addicts, who cannot afford drugs at times. The products like Guthka have come as easy respite, as per Dr Abdul Majid, incharge community medicine SKIMS, Soura; during surveys they found the huge list of substances other than tobacco products used by youth after getting used to drugs like guthka which comes handy as it can be afforded by even a school going kid with their little pocket money. The guthka pack costs just a rupee or two less than an ordinary biscuit or chips packet that costs not less than Rs 5. On the basis of research and interaction with addicts, many social activists like Mir explain, Gutkha is the gateway to the world of drug addiction and substance abuse. Besides being cheap and easily available, Guthka and tobacco containing pan masalas have attractive smell and package, easily enticing men, women and children.
This smokeless form of tobacco contains deadly chemicals which are major causes of mouth as well as throat cancer. Guthka also qualifies as a food product as it is taken from the mouth unlike other tobacco products which are inhaled. However, this product contains nicotine and as per new regulations notified by The Food Safety and Standards Authority of India (FSSAI), a statutory body under the health ministry to handle food related issues, notified as Food Safety and Standards (Prohibition and Restrictions on Sales) Regulations, 2011. It states under rule 2.3.4 that “product not to contain any substance which may be injurious to health: Tobacco and nicotine shall not be used as ingredients in any food products”.
Considering the health hazards of these smokeless chewable tobacco products, 12 states in India which now includes Delhi, resorting to the provisions of FSSAI, have banned the Guthka.
These states have banned the manufacture, storage, sale, transportation and display or distribution of Guthka and pan masalas containing tobacco or nicotine whatever name they may be called by.  Most of the states which banned these products were also manufactures of these products and a huge population was associated from cultivation and other processes as a source of livelihood for them. The proactive advocacy by NGOs like Voluntary Health Association of India and political will shown by the respective state governments to save millions of lives has been a commendable step to ban such products, thus helping also most vulnerable sections of society that forms the biggest chunk of consumers for this product.
Similarly, besides young population, poor and vulnerable communities are also getting attracted to type of leisure and results have started pouring into our hospitals and overall there is also high number of cancer patients due to use of various tobacco products. The example of other states is evidence enough to go for the banning the Guthka and allied products in the state. As, right now Jammu & Kashmir state is not the producer of such tobacco products and neither its larger population is the consumer of these products.  Delaying the ban at earliest will create more issues and problems to the state latter on. The ban by 12 states and 1 Union Territory will impact almost 38 million Gutkha users across India. It is high time that government of Jammu & Kashmir must adopt FSSAI regulations and ban Gutkha and similar food products containing tobacco/ nicotine as ingredients to save the younger generation from falling to tobacco menace.    

Fresh move to check food adulteration

The Bangladesh Standards and Testing Institution (BSTI) has recommended imposition of restriction and close monitoring on import, sale and distribution of formalin and other toxic chemicals largely used for adulteration of food and many other items. The BSTI proposal was put forward at an inter-ministerial meeting on intensifying drive against adulteration of foods on September 10 last at the conference room of the ministry of industries. Minister for Industries Dilip Barua was in the chair.

The inter-ministerial meeting was convened upon the directive of a standing committee of Jatiya Sangshad (JS). Officials from different government agencies who are engaged in drive against adulteration of food were present at the meeting. Director General (DG) of BSTI informed the meeting, according to press reports, that if adulteration of food continues at the present rate, one third of the country's total population would be exposed to serious health hazards in no time. Meeting sources said that the DG of BSTI stated that the punishment often meted out to food adulterators is nominal.

Participants at the meeting expressed grave concern over excessive use of toxic chemicals like formalin, calcium carbide, sodium cyclamate, ethophen and hydrose in a variety of food items including fruits, fish, farm chickens, medicines and other essentials. The meeting emphasised the need for strengthening government's food safety council to prevent spread of adulteration. The BSTI, according to reports, is assigned to maintain standard of 156 items. A large number of other items remain out of BSTI control much to the detriment of public health.

From our experience we can say without hesitation that National Food Safety Advisory Council and Directorate of Food have so far failed to ensure food safety for the people. The latest BSTI proposal on sale and monitoring of formalin, if implemented, will serve a limited purpose as many other toxins including artificial colour are applied to a large number of food items harmful to human health.

The measures so far taken by the government against adulteration of food items have yielded no result. The menace has penetrated so deep into the entire food chain that it is very difficult, if not impossible, to eradicate it, only through this type of step. Almost every food item - fruits, vegetables, milk, fish, egg and spices, etc., are being adulterated by a section of unscrupulous people.

As we reported earlier in this column, if the authorities go for checking adulteration of prepared food in which harmful chemicals or dyes have been mixed leaving the main source of contamination untouched, the result of whole exercise will not be encouraging. For example, a variety of vegetables at growers' level get contaminated in the field. In rural areas, a section of farmers use poisonous pesticides and harmful chemical fertilizers in their crop fields. In many places the integrated waste management programme run by the Directorate of Agricultural Extension (DAE) for the last few years has failed to make any remarkable progress. The poisonous pesticides and chemical fertilizers find their way into the country from across the border in larger quantities. These are sold at cheaper rates which attract the growers to use those toxic substances in the fields. Experts say ignorance and easy availability of harmful pesticides and fertilizers encourage farmers to apply those in the crops.

Consumption of these crops will, in turn, have adverse effect on human health. The application of poisonous pesticides and harmful fertilizers is going on unabated for long. As the authorities concerned have failed to maintain regular supply of these major agricultural inputs, the farmers in their desperation, apply harmful substances to nourish and protect their crops. Therefore, if the government wants to weed out the menace, it should begin its work right from the crop field and not concentrate alone on prepared food.

In the backdrop of alarming trend in adulteration of food, some ruling Awami League lawmakers in parliament demanded of the government on September 11 last to take stern measures against adulterators. Shahiduzzaman Sarkar, MP, quoting statistics said that one fourth of the population in Bangladesh is likely to suffer from various types of cancer by 2025 for consuming adulterated foods. Another AL MP asked the government to amend the existing law providing death penalty or life imprisonment for the criminals engaged in adulteration of food. In reply, education minister Nurul Islam Nahid, on behalf of information minister Abul Kalam Azad told the House, if necessary, the government will amend the existing law with the provision for stringent measures against these criminals.

DINAMALAR NEWS

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