Nuffoods Spectrum India

FPI needs attention to reach new level

26 June 2018 | News | By NFS Correspondent

food

food

The Bharatiya Janata Party (BJP) headed by Narendera Modi formed the government at the centre on May 27 four years ago. The BJP has held that 'universal food security' is integral to national security. In its election manifesto, BJP noted that it will take steps to ensure that the benefits of the scheme reach the common man and that the right to food does not remain an Act on paper or a political rhetoric. It will review all the laws and schemes, in consultation with the states, to ensure a corruption-free efficient implementation of food security, which would be a priority. The BJP noted that it will review the successful Public Distribution System (PDS) models, and incorporate the best practices to revise the existing PDS, for benefitting the common man; Address the issue of under-nutrition and malnutrition; Encourage the production of cereals, pulses and oils; Radically transform the Food Corporation of India (FCI); Ensure contingency stocks for any exigencies arising due to natural calamities or external factors and Seek the participation of voluntary organizations in running community kitchens. Now with completion of four years in office of Modi government, NuFFooDS Spectrum spoke to the industry about the achievements of the government and what are the issues that still need the government’s attention.

 

The new policy announcements and the steps taken by Narendra Modi led government to enhance the growth of the food processing industries have been tremendous and game changing. The Indian food processing sector is one of the most vital contributors to the economic growth and is estimated to be at $130 billion. The Indian government has been working on and rolling out several new policies, which not only supports the existing food industry but also allows a 100 per cent Foreign Direct Investment (FDI) in this sector increasing the competition and improving the production standards at large. Also, at the same time providing incentives to support the growth of massive food market. With the rise in the development of food processing industries, the government has approved for 56 Mega food parks to bring producers, processors, and sellers together ensuring the overall development of the sector. The government is importing and providing the industry with functional and equipped state of the art machinery for storage of fresh produce and processing of the same. Sharing his views about the achievements of the government in the last four years, Vijay Surya, CEO, NutriParadise Foods says “With the aim to fulfil the growing demands and at the same time maintaining the standards of production, the government is investing on research and development (R&D) - crucial for the advancement in any field. It has approved 45 major projects along with Science and Engineering Research Board (SERB) to reduce food wastage, increase productivity, improve processing methods and enhance storage efficiency. To ensure the safety of the products and increase the standards, the government is providing loans up to 50 per cent of the equipment cost to set up food testing laboratories in India. Such steps not only ensure the survival of the industry but at the same time also showcase the government’s support to the food industry.” “Increasing customs duty on processed products from fruits and vegetables is another measure taken by Ministry of Food Processing Industries (MoFPI) to encourage domestic industries. This also boosts the Make in India project which can aid Indian food processors to flourish in the market,” Vijay Surya adds.

 

Over the years the healthcare sector has reformed tremendously in India. “As far as nutraceuticals are concerned, a profound change has been brought about by the current government which was quick enough in realizing the scope and extent to which this sector would rise in India,” says Sushil Khaitan – CEO & Director, Purenutrition.me. As Indians became more inclined towards preventive healthcare, nutraceuticals started gaining more popularity. However, nutraceutical manufacturers and importers had no regulatory controls over them. Lack of regulations allowed sub-standard products to reach the consumers, which was creating hurdles for the earnest ones in this field. A plethora of products that did not live up to their therapeutic claims, made it difficult to establish nutraceuticals as a reliable industry. “The current government, realized that not just the consumers but the entire segment was at stake. Finally in 2015, it introduced the much-required regulatory controls that compelled the manufacturers on improving quality and safety of products which contained active plant principles,” says Sushil Khaitan and adds “This regulatory intervention was introduced in November 2015 by a gazette notification and the quality and reliability of nutraceuticals has immensely improved since then. The notification even put a stringent control over the import of nutraceuticals which again was long term requirement. The Indian nutraceutical market is expected to cross $6 billion turnover by 2020 and the new regulatory intervention will play a big role in achieving that."

 

“While there has been lot of debate on Goods & Services Tax (GST), we believe it was important and long due for our nation to have a standard tax structure. A lot of traders and non-tax paying businesses have come under the scanner and it thus create a level playing field for everyone. Newage startups follow all regulations and taxation guidelines and were in the past missing out due to unfair trade practices. As a startup, we feel GST has seen an improvement in our ecosystem and we are happy with this,” maintains Shaan Marker, Co-Founder, SuperFit Asia.

 

Indian government has taken some of the novice initiatives in the past four years of its parliamentary power. Ashwin Satish Bhadri, CEO, Equinox Labs says “Make in India has proved to be its biggest contribution to the Indian economy, which largely includes Food Processing Industries that is growing at 12 per cent each year. To safeguard this large segment, the health ministers of various states have diverted their attention to creating a robust testing environment in the nation. This also brings under itself, India's 'First Health Ministers' Round table on Food Safety and Nutrition' organised by the Health Ministry in collaboration with Food Safety and Standards Authority of India (FSSAI). Not just safety, but concepts of Fortification, Organic Food have been prioritized to ensure a safe and healthy life for all. Under FSSAI, the Safe and Nutritious Food portal was launched to target food borne diseases and junk food related disorders at the ground level.” One of the biggest contribution by the Government of India would certainly be Food Safety Training and Certification [FoSTaC] Programme - a unified and streamlined training programme by FSSAI for every Food Business. Ashwin Satish Bhadri further says “The recent launch of The Orange Book has opened the doors of food safety to the corporate arena, often overlooked. The Experience Center - a technological initiative like Augmented and Virtual reality, will highlight the food safety journey and the regulations over the time period.”

 

Putting his views about the achievements of the central government, KC Raghu, Founder & MD, Pristine Organics, says “One of the most positive achievements of the current government has been the Pradhan Mantri Fasal Bhima Yojana, which has helped the farmers in India. This government is generally more aware about sustainability and the need for sustainable practices. While there hasn’t been much yet on the ground level towards it, the process of initiating some activities and setting agendas is a great start in working towards a sustainable future.” “While a lot of national prospects are taking shape on the home turf, on an International level India is building collaborations with countries and organisations alike. The most recent is the upcoming visit of the Dutch Prime Minister in India to discuss on agriculture, health and R&D amongst other topics. India has also built collaborations with Israel, Bhutan, Japan, European Food Safety Authority and the Global Food Safety Initiative with several others in these last four years for a strong food network across borders,” adds Ashwin Satish Bhadri. The Food Processing industry is critical to India’s growth and the government is focused on providing adequate impetus to the sector. A well-developed Food Processing sector will help facilitate crop diversification and generate employment opportunities. The introduction of modern processing techniques for food will result in improved shelf-life of the agricultural produce and ensure steady revenue to farmers. With the correct set of policy implementations and support, the industry can grow by leaps and bounds, taking India to a new position of strength and prosperity in the global economy.

 

Implement schemes without delay

 

The government in power at the Centre is making uncountable efforts to support the Indian food processors but the support is being channeled only to the industries which have existing government ties. It is important to realize that the privatized industries striving on small investments and ventures need financial support to expand their potential for sales and marketing. Despite of all the government support on investments and easing the business processes for the industries it still needs a lot more clarity with respect to the processes which the sector needs to adopt. Referring to the challenges before the nutrition and nutraceuticals industries that need attetion of the government, Vijay Surya, CEO, NutriParadise Foods says “The government took a huge step by imposing Goods & Services Tax (GST) at both central and state levels ensuring its is adopted by each and every organisation. Although it is an effective step, it demands a detailed guidance system to make the organizations, as well as general public, understand the concept. Imposing GST on foods especially foods designed for special dietary uses, nutraceuticals and functional foods might result in the end consumers especially lower economic class patients feeling them to be expensive and unaffordable, affecting the sales of Nutraceutical industries at large.” The situation has changed immensely over the last decade. The current regulations have streamlined a lot of processes. For example, previously there were 8 different laws trying to govern the sector which proved very inefficient. The FSS (Food Safety and Standards) Act and FSSAI (Food Safety and Standards Authority of India) brought everything under one roof and introduced a lot of necessary reforms.

 

However, since nutraceuticals is an emerging field, Sushil Khaitan – CEO & Director, Purenutrition.me says “The struggle still continues. For example, the new regulation makes it a mandate for manufacturers to prove the therapeutic efficacy of the phytoactive principle in the product. This is different from regulation in other sectors which demand an efficacy report of the whole product not a specific ingredient. Sometimes the clinical trials or therapeutic studies are not available for these plant based products which puts the entire burden of study on the manufacturer. This makes the process of introducing a new product into the market a lengthy and at times, a difficult one. This also adds to the cost of the product. We need to ensure that the guidelines strike a balance between the quality and price of the product.” Also, another area that has been impacted is the import sector. Since India is a booming market for nutraceuticals, a lot of foreign companies wish to set up a base or collaborate with Indian brands. “The regulations coming into effect should be such that they work with the foreign entrepreneurs and investors as well. The Acts regulating the nutraceutical industry are comparatively new and still being reformed. Hence, its proper and timely implementation has become a challenge,” adds Sushil Khaitan. Another area that still needs intervention is financial aid. Indian investors are still hesitating from investing into nutraceuticals. Lack of funding makes it difficult for companies, especially medium and small scale ones (SMEs) to survive. It also ends sup reflecting in the cost of the product. Thus, the section of the population that is most in need of this health boosting products are not able to get it.

 

Echoing similar views about challenges before the startups, Shaan Marker, Co-Founder, SuperFit Asia says “What we would like from the government is actually roll out benefits and incentives to startups in all categories. While polices exist, we are unable to seek the benefits of these due to lack of awareness and educating business owners. Local seminars and conferences hosted by Government for startup grants will see fresh energies in young entrepreneurs.”

 

Nutrition still remains a huge challenge. As far as India is concerned, Dr Sanjay Sarin, Head of FIND India says “38 per cent of the children under five are affected by stunting; ~21 per cent of children under 5 have been defined as ‘wasted’ or ‘severely wasted’ – which means that they do not weigh enough for their height; 51 per cent of the women of reproductive age suffer from anaemia and >22 per cent of adult women and 16 per cent of adult men are overweight.”

 

KC Raghu, Founder & MD, Pristine Organics says “The sector is facing many challenges in both food and production pattern. Talking specifically about food, the MSP (Minimum Support Price) still continues to be a bane. As per M S Swaminathan formula-C2 instead of A2+FL remains a pipe drink for farmers. When India had self-sufficient production in 2016-17, import of 6.6 million tons of pulses destroyed the fair price for Indian pulse producers. The Sugar industry also is a dire state, with FRP for sugarcane at 90-100 per cent of the sugar prices. MSME sector is dominant in food processing. Less than 20 per cent of its CapEx is met with state financial institutional funding. Working capital funding is abysmally low at 1/4th of the requirement as per Naik committee recommendation. While the food parks were a great concept, they are yet to take off as envisaged. While, in the production pattern there is over emphasis on select crops. eg: Production of Potato hogs is 1/4th of the complete horticulture produce. Agricultural exports have been drastically coming down, and there is no move yet to address this.”

 

However, a lot needs to be done, says Ashwin Satish Bhadri, CEO, Equinox Labs. He further says “The food safety fiascos that occurred in the last 4 years were gargantuan; the staple diet was compromised, which is why, stringent laws have to be in place. Ayushman Bharat is a concept to safeguard the health and wellness of people on the medical front. Mega Food Parks, Cold chain and Infrastructure, creating food processing capacities, filling the gaps in the supply chain, Food Safety and Agro conducive production are some steps that the government has initialized. The existing measures have to be filled and new amendments have to fill the gaps - such must be the strategy of the government in this last year. “

 

“Although Government of India has released a good number of policies there is a challenge of implementation. The political parties are surrounded by multiple interests where each competing for their attention, the implementation of such policies cannot reach up to the grass root level,” says Dr R B Smarta, MD, Interlink Marketing Consultancy and adds “more constructive steps should be taken up by and for multilateral communication be institutionalized to create awareness.” The good part is that the government has already started working on bridging the gaps in the food sector. Several schemes and polices have been framed for the SMEs to help them in reaching out to more people in an efficient way. However, Sushil Khaitan says “while these schemes do support them, its implementation still remains half-baked as most of the Banks and NBFCs (Non-Banking Financial Company) hesitate from giving loans to these aspiring manufacturers. Once the government intervenes in this and improves the inflow of cash into this sector, nutraceuticals will be able to emerge as a true contributor in preventive healthcare.” 

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