TEARS FROM AND FOR ONIONS-WHO IS RESPONSIBLE?

Is onion an important food for Indians? Obviously it appears so as reflected by the political significance attached to shooting prices that rule the onion markets across the country. It is not easy to forget what happened in Delhi State two decades ago when spiraling onion prices resulted in collapse of the then government. Present situation is reminiscent of what prevailed then and it appears Onion and Petrol are competing with each other to see which will breach the Rs 100 mark first! What is incongruous is the effect of this price escalation of onion on the national economy and the muddied thinking of the present day government in tackling the same. Here is a take on this "tear some" issue as is being experienced by the Indian citizen every day!

"The uptick of wholesale prices to a six month high of 6.1% in August, largely fuelled by a 244.6% increase in onion prices, is bad news for the economy. Not only does it set back hopes of a rate cut to boost investments in the monetary policy review by the RBI at the end of the week, it also highlights the government's continuing inability to manage the food economy and rein in volatility of food prices. Blaming bad weather doesn't cut much ice. The rising prices of essential food items like rice despite good monsoons are mainly due to the large stocks accumulated to meet the needs of the food security Act. The continuous increase in minimum support prices for rice and wheat by the government has also proved counterproductive as it has discouraged a shift in cropping patterns to vegetables or the diversification of production to livestock, fish and poultry. Consequently, prices of vegetables and high protein foods like milk, eggs, fish and meat have shot up, making them unaffordable to the poor. Inadequate storage facilities and the failure to modernise the food supply chain have also added to the problem. Curbing volatility in food prices and improving supply would require strong measures by both state and Union governments. States have to reform the Agriculture Produce Marketing Committee Act to allow for contract farming, direct marketing and setting up markets in the private sector. Adequate credit has to be ensured for setting up cold storage chains. The bias against large organised retailers, including foreign chains, has to be dropped. Given their global supply chains, they would have cooled domestic prices by realigning their procurement orders. The government should also shift to direct cash transfers from food subsidies, thus reducing the need to build huge stocks".

If government sources are to be believed this phenomenon is unlikely to last for long and the prices would come down in a "few days" time! According to records onion prices have been ruling abnormally high during the last few months and it is far fetched to expect the prices to come down soon. Announcing imports is just a play of words meaning nothing as not even a kilogram of foreign onion has landed in the country yet! It is a pity that consequences of policies announced like the Food Security Act are not thought of and how the country will suffer because of these follies. It is believed that farmers may increasingly switch over to cereals in the coming years because of high procurement prices offered to them, further endangering the nutritional security of the population. One can only hope that a more cohesive and visionary government after the coming general election will address these issues and reverse the present disastrous policies ruining the country. 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FRUITS AND VEGETABLES-GOING OUT OF THE DIET?

It may be a global phenomenon that the market prices of fresh protective foods are always higher than durable foods with predominant starch content like cereals. For example in many western countries fruits and vegetables costs an average consumer almost two to three times more for getting the recommended minimum quantity in the daily diet compared to cereal based foods. Glaringly food industry manufactures more high calorie foods at low costs attracting more and more poor income group consumers than those based on fruits and vegetables. Naturally high calories foods with high sugar, starch, fat and salt flood the market with palate tingling quality and the result is there for all to see with people bloated bodies swelling the ranks of the population day by day, the obesity epidemic showing no sign of being contained. If this is the case of rich nations what could be the situation in a poor country like India? According recent studies, the syndrome of excluding fruits and vegetables from every day diet is spreading fast in India with very serious future implications on the health of the already nutrition compromised population. Here is a take on this new disturbing trend.  

"The fear of bad monsoon has suddenly hiked the vegetables and fruits prices by 300% from the farm to your dining table," Associated Chambers of Commerce and Industry of India (ASSOCHAM) said in a survey on "Rising prices of fruits and vegetables" in which over 5,000 people took part. Over 88% of middle income group (MIG) and lower income group (LIG) find difficult to manage the household budget and squeezing families' finances to the lowest level due to uncertainty of rains, according to a country-wide survey conducted by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) under the aegis of ASSOCHAM Social Development Foundation (ASDF). The survey was conducted in major places like Delhi-NCR, Mumbai, Kolkata, Chennai, Ahmedabad, Hyderabad, Pune, Chandigarh, Dehradun, Bangalore and so on.  During the last three years, the salary of average common man has gone up by 10-15% but on the other side the prices of vegetables have also gone up by 250-300%,adds the ASSOCHAM paper. The maximum impact was felt in major cities like Delhi (1st), Mumbai (2nd), Ahmedabad (3rd), Kolkata (4th), Chennai (5th), Hyderabad (6th) and Pune (7th). Around 82% of lower middle class families have been forced to skip or squeezed their budgets for vegetables because of skyrocketing prices.
The prices of most of the widely consumed vegetables have shot up during the last two weeks in most parts of the country with the early onset of monsoon rains. The sudden increases of vegetables prices have seriously hit the common men mainly in the metro cities, adds D S Rawat, Secretary General, ASSOCHAM"

Is it not tragic that the so called democratically elected government is indulging in petty politics by bringing an ordinance on food security (old wine in new bottle!) that is supposed to legally 'guarantee" two thirds of the population with some hypothetical quantity of rotten cereals? Assuming that the guaranteed quantity is delivered without any operational hiccups and imagining the grain is edible, does the government feel that its duty is just to keep the "body and soul" of its citizens together without providing any means of nourishment through protective foods? The spooky statistics from the government may say that there is less than 5% inflation in the country but the prices of essentials like fruits and vegetables have gone through the roof recently! The traders are now quoting the rate of these foods "per quarter kilo" to make it appear reasonable, a gimmick that may not go well with the consumers. Probably if the government further shirks its responsibility for ensuring "nutrition security" to its citizens, traders may start selling such foods "per 100 grams" basis by next year!   

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

      

THE GREAT CHEESE STORY-WHY AMERICANS ARE OBESE!

Does any government has a role to play in deciding what its citizens must eat or what should not be eaten? This issue received a sharp focus recently when some of pro-active policies are being taken up by governments in a few countries to discourage consumption of patently unhealthy foods. Higher taxation, limiting large sized packs and more forceful labeling regulations have been the chosen routes for achieving the goal of herding the consumers to live more responsibly and avoid social burden through diseases like diabetes, CVD, obesity, cancers etc. The on-going tussle between the farming lobby and consumer interests invariably ends up in favor of the former because of close nexus between agriculture lobby and the governing political class. Here is an interesting commentary by a critic regarding the systematic blows being delivered to the consumers by the American government through some of the most idiotic policy orchestrations to oblige its farming lobbies with almost all multinational giants investing heavily on an agenda of protecting their financial flanks.   

"Also, the Golden Age of Cheese was not purely the result of individual choices. It reflects decades of pro-cheese U.S. agriculture policy. I am not making this up. The nation's cheese binge is a case study in the broader dysfunctionality of federal farm legislation, the latest iteration of which is being debated in Congress. Yes, there are real social trends at work, too. An aging population consumes less milk as fluid and more in solid form; a wealthier population can afford a richer diet, including cheesy dishes eaten at restaurants. But the country's appetite for cheese also reflects U.S. policy. Since the New Deal, Washington has tried to protect dairy farmers through price 

supports and production controls so arcane that only specialists can understand them. As a 2004 Agriculture leaving Department report explained, the net effect of dairy programs is to prop up fluid milk prices even when producers make more of it than people want to drink — plenty of excess to dump on cheese manufacturers. "Thus, consumers see lower butter and cheese prices and higher fluid milk prices than would appear in the absence of the programs," the USDA found. Not surprisingly, fluid milk consumption has stagnated while cheese consumption has grown. Of the 188.9 billion pounds of milk produced in 2008, some 82 billion were sold to cheese makers, according to the USDA. On top of those warped incentives, the Dairy Production Stabilization Act of 1983 authorized the Agriculture Department to collect a fee from all dairy farmers and turn the money over to a corporation known as Dairy Management, which promotes consumption of cheese and other dairy products".

Cheese and ice cream are two products liked universally and one of the reasons for this phenomenon in a country like the US is the ridiculously low prices at which they are offered in the market. In contrast fluid milk consumption is deliberately depressed by making it much more costlier which has the effect of stagnating consumption by those who find it increasingly difficult to buy it due to escalating prices. The twin objectives of satisfying the farmer as well as the industry are achieved by increased retail prices of milk to the consumer and supply of excess milk production to the dairy processing industry to turn out products like cheese, butter and ice cream at relatively low prices. It is the consumer who is left behind in this convoluted situation as drinking milk is progressively reduced and consumption of high calorie and high fat foods is increased putting the consumer health in jeopardy. This explains the tripling of the population that has become over weight and obese in the last 40 years and to day more than two thirds of American population are categorized as either over weight or obese! It is the unfortunate political compulsions that make the ruling class blind to the dangers of wrong and unhealthy food and environmental degradation due to pollution, global warming and other scientifically proven findings. If the US is facing frequent hot weathers, droughts, floods and similar abnormal situations to day, one must thank its government for the wrong policies being pursued by it. 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

CARE FOR CONSUMERS OR PERISH! CATERING SECTOR BEWARE!

What lies ahead for the catering sector in India? Though scanty reports on the present status of this sector do indicate a booming business, this trend need not last for long if one goes by the experience of this sector in other countries. Having higher income in hand may drive customers in hordes to restaurants but such a situation also raises aspirational goals, shifts the goal posts and induces frustration among the patrons. In India one of the sectors of business that is doing extremely well is catering business and the margin of profit is growing exponentially with steep increase in prices of their offerings, forcing some of the lower middle income group of population to shy away from "eating out" option more and more, though it might not have affected others with unlimited disposable income at their disposal. The trend being foreseen in the US may not be too relevant to India but still it is a pointer to the likely happenings in the coming days for which Indian catering sector must be prepared if not to day but in the not too distant a future.

"Agents can head off this scenario and build a strong consultative relationship with their restaurant customers by asking key questions at renewal time. Here are some of the trends that could put restaurants at risk and the questions agents should ask their restaurant customers :
    1. Mobility. Has the restaurant added new services, such as delivery of meals using hired drivers with their own cars?
    2. Branch out businesses. Has the restaurant started a new line of business, such as catering?
    3. Trendy foods. Has the restaurant introduced new menu offerings as part of the strategy for attracting more customers, such as locally sourced foods, an emphasis on organic ingredients or assurances about non-allergenic ingredients?
    4. Additional payment methods. Is the restaurant accepting new methods of payment, such as online credit charges or smartphone purchasing?
Armed with the answers to these kinds of questions, you can offer your customers a menu of options that go beyond the coverage required for an on-site restaurant operation. Insurance carriers with experience in the food services industry can work closely with you to make sure your customers have the right "ingredients" in their policies."

Discussing about the prices customers have to pay at an ordinary restaurant which have practically doubled in the last three years in the name of inflation, it should not be forgotten that there is a "Lakshman Rekha" or a point of no return as far as the customers are concerned. Probably catering sector is under an illusion that all people in the country have plenty of money to squander like the young IT professionals or the much pampered government employees, corrupt as well as honest. India is still an affordable country where it is possible to get a full and decent meal in a functional restaurant at a price less than Rs 20 while most restaurants have hiked up the same to Rs 50 and beyond. Any restaurant in a city with tolerable hygiene and minimum ambiance will cost a family of four at least Rs 250 but imagine how many families can afford this if such restaurants are to be visited at least once in a week! Restaurant associations must ponder over this fact and unless there is a genuine attempt to rationalize prices they may have to face the wrath of the people in the form of reduced patronage and infrequent visits to their establishments. One of the reasons for the street vendors to become darlings of the people and make them reputed landmarks in may towns and cities in India and for the steep popularity of the Food Truck phenomenon in the US is precisely the fact that the organized restaurants are pricing themselves out of the minds of common man! Beware of this trend!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

"BREAKING" THE MILK-THE FLIP-FLOP POLICY

India has been proud of its achievements in reaching the top amongst milk producing nations with fluid milk out put touching 105 million tons. Sadly what has been gained through hard work of the dairy farmers is about to be frittered away through short sighted policies of GOI and to add to the humiliation a senior minister has given sufficient hints to the hoarders that there is going to be a milk shortage in summer so that they can get ready to squeeze the consumer in the coming months!. In order to have a better perception of the bungling by GOI have a look at the following report.

"Diversion of milk to produce casein has been a serious concern. This is the reason for seeking a ban on export of milk, casein and other milk products," an agriculture ministry official said. There is a shortage in the local markets as exporters pay an extra Rs 2-3 per litre more for milk, he added. During August – December 2009, about 7,000 tonnes of casein was exported from Tughlakabad dry port in Delhi and Jawaharlal Nehru Port Trust in Mumbai. About 35 litres milk is used to produce a kg of casein. The 7,000 tonnes of casein consumed 24.5 crore litres or over 16 lakh litres a day of milk. This is nearly 60 per cent of 26-27 lakh litres milk marketed every day by Mother Dairy in Delhi, of this 6-7 lakh litres per day is by re-converting milk powder into liquid form. Casein exports enjoy 9 per cent duty entitlement passbook (DEPB) benefit on the free-on-board value of their shipments.

Imagine the consequences of India entering the international market for important of milk powder! The world price for milk is going to hit the roof if such a thing happens and EU countries would be the happiest lot as their surplus milk powder and butter, being procured under a purchase scheme from their

V.H.POTTY

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http://foodtechupdates.blogspot.com

RISING FOOD PRICES-WHO IS RESPONSIBLE?

Between 2006 and 2008, the prices of commodities like wheat and soybean trebled causing deep dents in the purchasing power of consumers who have been used to cheap foods manufactured by the food industry. The global recession has much to do with dramatic changes and it is unlikely that the prices will go down in future due to supply side constraints. Consumers looking for foods with reduced prices seem to be shifting their allegiance away from the branded products to generic foods offered by small processors because of cost considerations. According to industry sources, consumers are finding it difficult to kick the habits of purchasing low cost foods and organized food industry may have to strive hard to recapture these consumers and their perception is reflected in the following report:

"What consumers really want, though, is to pay less and, unfortunately, sustainability doesn't come cheap. Producing stuff badly is cheaper than producing it well," says Andrew Mitchell, chair of the Forest Footprint Disclosure Project, an initiative designed to force companies to recognise the true cost of agricultural production. "There is no doubt that we are getting food on the cheap," he said".

The tendency to blame countries like India, China and others for the price rise cannot be justified while ignoring the conspicuous consumption habits nurtured in developed countries over the years. Probably the amongst the industry captains in industrialized countries is reflected by their uncalled for comments that high protein diets being consumed by the population in some of the emerging countries is responsible for the steep price in food commodities in their countries which amounts to condemning these populations for their aspirations for a better quality and more safer foods. Probably what is needed is an introspection for taking corrective measures to set right many distortions in the economy of their own country.

V.H.POTTY
http://vhpotty.blogspot.com/
http://vhpotty.foodtechupdates.blogspot.com