Food Safety in India: Challenges and Opportunities

Md. Wasim Aktar* Pesticide Residue Laboratory,2000, Indian dry chili exports also faced rejection in
Department of Agricultural Chemicals, Bidhan ChandraGermany, Italy, Spain and the U.K. due to the
Krishi Viswavidyalaya, Mohanpur-741252, Nadia, Westpresence of aflatoxin.8 More recently, exports of chili
Bengal, Indiaand curry powder faced problems due to the use of
1. Introductionthe prohibited red dye Sudan 1 (Jaffee, 2005). In
Rising incomes and urbanization, an expandingFebruary 2005, a massive recall of some 600 food
domestic consumer base concerned about foodproducts took place in the UK because of the
quality and safety, and rapidly growing agriculturaldetection of Sudan 1 in Worcester sauce. This was
exports have been important drivers for thethe largest ever food recall in the U.K. and it affected
increased attention to food safety in India. But theall major retailers as well as large numbers of food
development of effective food safety systems ismanufacturers and food service companies, as the
hampered by a number of factors, including:Worcester Sauces had been used in the preparation
restrictive government marketing regulations, weakof a large number of different products. It is
policy and regulatory framework for food safety,estimated that this recall, and associated expenses,
inadequate enforcement of existing standards, acost the U.K. and other European food manufacturers
multiplicity of government agencies involved, weaksome 200 million Euros (Jaffee, 2005). The source of
market infrastructure and agricultural supportthe Sudan 1 dye in the Worcester sauce was traced
services. The small farm structure further limitsto chili powder imported from India in 2002. Fish and
farmer capacity to meet increasing domestic andFish Product Exports. Fish and fish products are one
export food safety and SPS requirements.of India's largest agricultural export earners, totaling
Addressing food safety concerns in India will requireUS$1.3 billion in 2004/05. Over the years, India has
adoption of appropriate legislation, strengtheningencountered several food safety problems with its
capacity to enforce rules, promoting adoption offish and fish product exports. Most prominent, in
good agricultural, manufacturing and hygiene1997, the European Commission found the industry to
practices, greater collective action, and somebe non-compliant in maintaining hygiene standards in
targeted investments. Implementing these actions willfish processing plants. In May 1997 the European
require joint efforts by the government and theCommission banned Indian exports of fresh
private sector.crustaceans and cephalopods and imposed border
Developing countries are paying increased attentiontesting for Salmonella and Vibrio spp. for frozen
to food safety, because of growing recognition of itsproducts (Henson, Saqib and Rajasena, 2005).
potential impact on public health, food security, andBecause of continued detection of salmonella, all
trade competitiveness. Increasing scientificexports of fish and fishery products to the EU from
understanding of the public health consequences ofIndia were banned in 1997. While India has for the
unsafe food, amplified by the rapid global transmissionmost part been able to address the hygiene-related
of information regarding the public health threatsproblems plaguing its export of fishery products in
associated with food-borne and zoonotic diseasesthe late nineties, Indian exports are now under
(e.g. E. coli and salmonella, bovine-spongiformscrutiny because of problems related to antibiotic
encephalopathy (BSE), severe acute respiratoryresidues and bacterial inhibitors (antibiotics,
syndrome (SARs) and H5N1 avian flu) through variouspreservatives and chlorine) (Henson, Saqib and
forms of media and the internet has heightenedRajasena, 2005). It is widely acknowledged that in
consumer awareness about food safety risks to newthe future, heavy metals and other contaminants
levels globally (Lindsay 1997, Unnevehr 2003, Buzbycould be an emerging issue particularly because of
and Unnevehr 2003, Kafersteing 2003, Ewen et al.the increased attention to heavy metals in the EU.
2006, Bramhmbatt 2005). Increased understanding ofSurveillance of fisheries products for heavy metals
the impact of mycotoxins, which can contaminatehas already begun in the U.K. Although India has been
dietary staples such wheat, maize, barley andable to broadly comply with food safety
peanuts, has further raised food security and publicrequirements for each of the export commodities
health concerns in many developing countriesmentioned above, it continues to face problems
(Dohlman 2003, Bhat and Vasanthi 2003, Unnevehracross a range of agro-food exports. Evidence of
2003). As developing countries seek to expandcontinuing trouble is clearly apparent from Import
agricultural exports especially to OECD countries,Refusal Reports issued each month by the USFDA
many are receiving a wake-up call on the challengesfor food and drug imports into the United States.
of meeting both government and private sanitaryMost recently, in both April and May 2006, India had
and phyto-sanitary (SPS) standards in exportone of the highest rejections among all countries
markets (Otsuki et al. 2001, Henson 2003, Unnevehrexporting to the USA; India faced 176 rejections in
2003, World Bank 2005a). Private standards orMay, 2006 and 211 rejections in April, 2006.9 While a
supplier protocols have grown in prominence over thesignificant number of the 176 rejections were issued
past decade as a means to further ensurefor drugs and cosmetics, the grounds for rejection
compliance with official regulations, to fill perceivedamong the various food items included salmonella and
gaps in such regulations, and/or to facilitate theor filth in raw peeled shrimp, prepared Indian breads
differentiation of company or industry products from(paratha, roti), basmati rice, sesame seeds, pepper,
those of competitors. Trends in private standardscoriander and chili powder; pesticide residues in lentils;
increasingly tend to blend food safety and qualityfailure to declare the color additive FD & C Yellow
management concerns (i.e. the recent creation of ISONo. 5 in banana chips; and unsafe coloring in cream
22000), or to have protocols which combine foodbiscuits. The number of rejections and the range of
safety, environmental, and social (child labor, laborproblems reveal extensive safety problems in Indian
conditions, animal welfare) parameters (Willems et al.food products. It is also reasonable to assume that
2005, World Bank 2005). At the same time, increasingthe extent of the problems faced by domestic
globalization of trade introduces greater risks ofconsumers is far more serious as there many more
cross-border transfer of food-borne illnesses. Recentmicro, small and medium enterprises that cater to
cases of disease episodes in the United Statesdomestic consumers and generally pay less attention
resulting from imported food produce, such asto food safety issues. By contrast, exporters are
cyclospora from raspberries, hepatitis A fromlikely to be more well-established and larger firms
strawberries and salmonella from cantaloupe (Calvinwith better technology and relatively more cognizant
2003), illustrate to developing countries the potentialabout food safety concerns.
food safety challenges that can arise in a more7. Challenges to Improve Food Safety in India
globalized market. Weaknesses in food safetyImproving food safety in India, whether for the
systems can have a high cost to society and thedomestic market or for export trade, is hampered by
global economy. The World Health Organizationa number of structural, policy, institutional, technical
(WHO) estimates that 2.2 million people worldwide dieand cultural barriers.
from diarrheal diseases caused by a host of bacterial,Policy and Regulatory Environment. A number of
viral and parasitic organisms, which are spread bypolicies and regulations governing agricultural
contaminated water (WHO 2006a). In India, it ismarketing and food processing complicate the
estimated that 20% of deaths among children underimplementation of food safety measures by the
five are caused by diarrheal disease (WHO 2006b).government and by the private sector. Two critical
The SARs outbreak in 2003 in East Asia is estimatedmarketing regulations are the State level Agricultural
to have caused an immediate economic loss of aboutProduce Marketing (Development and Regulation)
2% of the Region's GDP in the second quarter ofActs and the Small Scale Industry Reservation Policy.
that year, even though only 800 people died fromAlmost all states in India have an Agricultural Produce
the disease (Brahmbatt 2005).1 The Lowy InstituteMarketing (APM) Act, which gives state governments
for International Policy (2006) estimates that a mildthe sole authority to establish and manage wholesale
global outbreak of the avian flu can cost the worldmarkets.10 The Act, adopted by most states in the
1.4 million lives and close to 0.8% of GDP (US$3301960s and 1970s, prescribes the setting up of a
billion) in lost economic output. At the same time,network of state controlled "regulated markets" or
country reactions to protect its citizens from foodmandis and the establishment of Market Committees
safety risks can also have large consequences forto operate each. All "notified" agricultural commodities
exporting countries. Otsuki et al (2001) examined thegrown in areas surrounding the market are required
projected impact of the EU's new harmonizedby law to be sold only through these markets, with
aflatoxin standard on the value of trade flows to 15the number of notified commodities varying by state
European countries from 9 African countries andand market. Implementation of the Act and its
found that it could decrease African exports by 64%enforcement vary considerably by state. In 2005,
(US$670 million). Food safety concerns are gettingthere were nearly 8,000 regulated markets in the
widespread attention in India. The country's ruralwhole country.11 The requirement that all agricultural
development strategy, for which a key element iscommodities be channeled through the regulated
the promotion of increased agricultural exports as amarkets not only increases transactions costs, but is
means to foster rural growth and poverty reduction,also a major obstacle to preserving produce quality
is coming up against tightening food safety and SPSand traceability. In 2003, the GOI formulated a model
standards in prospective markets (World Bank 2006a,Agricultural Produce Market Act for state
2006b). From a domestic perspective, the largegovernments to adopt, which removes the
national market of 1.2 billion people is undergoing rapidrestrictions on farmer direct sales and permits entities
change. Increasing incomes, a growing middle class,outside of government to establish and operate
increased urbanization and literacy, and a populationwholesale markets. To date only 10 of the 28 states
highly tuned to international trends fueled by theand Union Territories have adopted the model Act.12
information technology boom are creating a largeThe Small Scale Industry (SSI) Reservation restricts
consumer base giving increasing value to food qualitythe processing of certain commodities to the small
and safety. Improving food safety systems, to meetscale sector. Although the list of commodities subject
domestic and export requirements, however, face ato this restriction has been reduced significantly during
number of policy, regulatory, infrastructural andthe last decade, several processed agricultural
institutional obstacles.products are still subject to SSI reservation, such as
2. OBJECTIVESrapeseed, mustard and ground nut oil,13 bread,
(i) To review the main drivers for the increasedpastry, pickles and chutneys, and hard boiled sugar
priority to addressing food safety risks in India incandy (Department of Small Scale Industries 2006).
both the export and domestic markets, (ii)ToThe SSI reservation imposes constraints on
examine the nature and effectiveness ofenterprises' ability to undertake the necessary
government and private responses to the foodinvestments (e.g. HACCP) and certifications required
safety challenges, with special focus on high valueto meet the domestic and international food safety
agriculture; (iii)To identify the constraints to moreand SPS requirements.14 There is a complex web of
effective responses; (iv) To examine the implicationslaws governing the processed food sector which
for policy; v) To review food safety with specialcomplicate implementation of food safety measures.
relation to Pesticides; and vi) To discuss briefly aboutThese laws are enforced by 8 different ministries.
the food safety from consumer point of view.Some of the most critical are: Prevention of Food
3. Types of Food Safety RisksAdulteration Act 1954 implemented by the Ministry of
Food safety risks, as they relate to human health,Health and Family Welfare; Milk and Milk Products
arise from of a number of factors. These include: (i)Order 1992 and Agricultural Produce Grading and
microbial pathogens (bacteria, viruses, parasites, fungiMarking Act 1937 implemented by the Ministry of
and their toxins); (ii) pesticide residues, food additives,Agriculture; the Essential Commodities Act 1955,
livestock drugs and growth hormones; (iii)Standards of Weights and Measures Act 1976,
environmental toxins such as heavy metals (e.g. leadConsumer Protection Act 1986, and Bureau of Indian
and mercury); (iv) persistent organic pollutants (e.g.Standards Act 1986 implemented by the Ministry of
dioxins); and (v) zoonotic diseases (e.g.Avian flu,Food, Consumer Affairs and Public Distribution; the
Japanese encephalitis, tuberculosis) (Buzby andFruit Products Order 1955 implemented by the
Unnevehr 2003, Ewen et al. 2004).2 The health risksMinistry of Food Processing Industries; import and
associated with these agents impact the whole foodexport regulations implemented by the Ministry of
supply chain, starting from input supply to the farmCommerce; Trade in Endangered Species Act
to the consumer table (Figure 1).implemented by the Ministry of Forest and
Figure 1 Food Supply Chain: Potential Sources of FoodEnvironment; Atomic Energy Act 1962/Control of
Safety HazardsIrradiation of Food Rule 1991 implemented by the
Common use of pesticides in modern farmingMinistry of Science and Technology; and Infant Milk
inevitably leaves some residues on food crops.Substitutes, Feed Bottles and Infant Foods
Potential food safety hazards at HOME can be(Regulation of Production, Supply and Distribution) Act
divided into three categories: 1. Biological1992 implemented by the Ministry of Human
2. ChemicalResource Development (Patnaik 2005). These laws
3. Physicalalso authorize several agencies to lay down standards
While all the above type of hazards are importantfor food products: (i) Bureau of Indian Standards
from viewpoint of prevention, the focus here will be(BIS) of the Ministry of Food, Consumer Affairs and
on the microbiological hazards and in that onPublic distribution under the BIS Act, (ii) Ministry of
foodborne bacteria, which can lead to illness if theFood Processing Industry under the Fruit Products
food is mishandled, particularly for those more at riskOrder, (iii) Ministry of Agriculture under "Ag Mark" and
-- the very young, the elderly and thethe FPO, (iv) Ministry of Health and Family Welfare
immuno-compromised. Certain processes or handling(MOHFW) under the PFA Act; (v) Export Inspection
practices by consumers in the home have beenCouncil under the Export-Import Policy, and (vi) the
identified as being essential or critical in preventingDefense Ministry for their own purchases. These laws
foodborne illness. These practices, which prevent orand associated regulations in some cases prescribe
control the "meals" microbial contamination associatedcontradictory or differing standards. For example,
with foodborne illness, are under the direct control ofwhile the Fruit Products Order (FPO) allows the use
the consumer, from food acquisition through disposal.of artificial sweeteners in fruit products, the
They are purchasing, storing, pre-preparation,Prevention of Food Adulteration (PFA) Act bans it.
cooking, serving, and handling leftovers. Failure toMandatory declaration labels required by the PFA
take appropriate action at these critical points coulddiffer from those of the Packaged Commodity
result in foodborne illness.Regulation Rules (1977) under the Standard Weights
4. Pesticides and Food Safetyand Measures Act. The emulsifier and stabilizers
Fruits, vegetables and cereal crops treated withpermitted for use in jams and chutneys under the
pesticides are perceived by some as a health risk,PFA differ from those allowed under the FPO. In
and this belief along with affordability, and time1998, the GOI began the process of rationalizing the
pressures may all play a role in limiting consumption oflegal and regulatory framework for food and food
plant foods, such as cereal grains, fruit and vegetableprocessing. The Prime Minister's Council on Trade and
consumption of consumers in Asia. The World HealthIndustry established a Task Force on Food and
Organisation (WHO), the World Cancer ResearchAgro-Industries Management Policy to recommend
Fund (WCRF) and many other national andoptions for rationalizing the various policies and
inter-governmental agencies recommend that adultsregulations. The outcome was a new Food Safety
consume at least 400g of fruit and vegetables perand Standards Bill, which was submitted to Parliament
day and 25-30 grammes of dietary fibre per day, butin August 2005 and is awaiting approval. The Bill aims
analysis of current dietary patterns around the worldto consolidate the laws relating to food. The key
indicate that many consumer are not achieving theseprovisions of Bill include: (i) the repeal of a number of
dietary goals, particularly those who are less affluent.Acts and Orders;15 (ii) the establishment of a Food
AFIC's Short Briefing on Pesticides, Food Safety andSafety and Standards Authority of India; (iii) definition
Health is intended to provide a science-based factualof the standards for food additives, contaminants,
overview of the issue, to enable consumers to makegenetically modified and organic foods, packaging and
better informed choice about their diet, in particularlabeling, and food imports; (iii) accreditation of
fruit, vegetables and grains consumption, and allaylaboratories, research institutions and food safety
unwarranted anxieties and concerns. Definition ofauditors; (iv) licensing and registration of food
Pesticide: The Food and Agriculture Organisationbusiness and setting penalties for offenses; and (v)
(FAO) defines a pesticide as 'any substance orestablishment of a Food Safety Adjudication Tribunal
mixture of substances intended for preventing,(Ministry of Food Processing Industries 2005).
destroying, attracting, repelling, or controlling any pestApproval of the Bill will be an important milestone in
including unwanted species of plants or animals duringstrengthening food safety systems in India. There
the production, storage, transport, distribution, andare a large number of government agencies involved
processing of food, agricultural commodities, or animalin agricultural marketing activities, more broadly or
feeds or which may be administered to animals forwith respect to specific commodities, which
the control of ectoparasites' Natural Toxins:complicates effective implementation of a coherent
Substances that are capable of causing cancer arefood safety strategy for the country. As in the case
virtually everywhere, even in natural compounds. Theof the soft drink contamination, the multiple laws and
FDA estimates that the intake of carcinogens fromagencies added to the confusion. The BIS was
man-made pesticide residues is extremely smallcharged with setting the standards for pesticides in
compared to carcinogenic residues that plantssoft drinks, while the MOHFW is charged with setting
produce naturally. According to Bruce Ames, athe pesticide standards for bottled water. Smallholder
professor of molecular biology and biochemistry atAgriculture. The current structure of the farm sector
the University of California, more than 99.99 percentin India constrains farmer capacity to meet domestic
of the pesticides Americans ingest are "nature'sand international food safety standards. Farming in
pesticides" or "natural toxins" (Hotchkiss, 1992; Moore,India is dominated by small farmers - the average
1989). Natural toxins are present in all plants and suchfarm size in 1990/00 was 1.8 ha (NABARD 2002).
food products as beans, lettuce, apple juice, wine,Most farmers face credit constraints (World Bank
black pepper, spinach, peanut butter and many2004), and literacy rates are low.16 These constraints
others. Of the known natural toxins, whichimpose limits on the number of farmers capable to
concentrate in parts per thousand versus parts peradopt more sophisticated farm practices and
billion in synthetic pesticides, none has been shown toundertake the necessary investments (e.g. land
cause cancer (Hotchkiss, 1992; Moore, 1989).improvements, obtaining necessary certifications, cold
Reasons of pesticide residues in foodstorage) to meet more stringent food quality and
Pesticide residues may be present in food because ofsafety requirements. They increase the cost of
the following reasons: 1) Direct use of pesticides ontransacting business and monitoring compliance with
food crops; 2) Animal feeding on pesticide treatedfood safety standards. Stringent land policies, e.g. land
feed; 3) Environmental contaminationceilings and restrictions on land rental, limit possibilities
Pesticide Use on the Farm: Many of today's foodfor greater land amalgamation (World Bank 2006c).
producers are taking an Integrated Pest ManagementInternational experience indicates, however, that
(IPM) approach to preventing, reducing or eliminatingfarm size constraints may be overcome through
pest problems. Growers and processors must makeinnovative interventions such as organizing farmers
complicated decisions prior to planting, during theinto producer groups, establishing collection centers
growing season, and during postharvest handling.(by supermarkets and exporters), using contract
Scientific IPM strategies give the grower economicfarming arrangements, and by creating public-private
incentives for sustaining long-term crop protectionpartnerships to assist farmers in a variety of ways,
with minimal disruption to the environment. Theincluding help in obtaining the capital required to make
agricultural community typically will use pesticideson-farm improvements and other investments (e.g.
judiciously as part of the IPM strategy whenevergrading or cooling facilities), developing and improving
proven alternatives are not available for pest control.farming skills through joint extension provision, and
Growers are hiring professional crop consultants withassistance in acquiring the required national and
increasing frequency for advice on maintaining orinternational certifications (Berdegué et al. 2003,
increasing production through the utilization of IPMBoselie et al. 2003, Dries et al 2004, Reardon and
programs structured toward their specific agronomicSwinnen 2004, Reardon and Timmer 2005a, 2005b).
situations. Integrated pest management: It is anIn order to address various food safety concerns in
ecological approach to pest management in which allboth the spices and fresh and processed fruit and
available control techniques are consolidated into avegetable sectors, some exporters initiated contract
unified program so that pest populations can befarming operations or "vendor screening" programs.
managed in such a manner that economic damage isOne industry that has been especially successful in
avoided and adverse side effects are minimized.establishing contract farming arrangements and
Practices used as a part of this managementmeeting stringent food safety and quality standards
philosophy include the following: 1) destruction of cropis the pickled gherkin industry. The industry, consisting
debris, 2) having pests feed and concentrate on trapof some 42 companies and nearly 50,000 smallholder
crops, 3) crop rotation, 4) selectivity of planting andoutgrowers, is concentrated in Karnataka, Andhra
harvest dates, 5) soil test analysis for crop nutrientPradesh, and Tamil Nadu. The leading gherkin
needs, 6) planting crop species adapted for localexporting companies each have several thousand
conditions, 7) using genetically improved crop varietiesfarmers under contract. The companies provide
with resistance to specific pests, 8) using biologicalintensive oversight and maintain extensive records of
control, 9) predicting pest outbreaks with computers,farmer practices, especially related to pesticide use.
10) pheromones for trapping pests, 11) scouting andAt least one company began the process of getting
monitoring for pests, 12) economic thresholds asoutgrowers certified under EurepGAP (World Bank
guides to pest control, 13) better timing and2006b). Contract farming has worked relatively well in
application of pesticides, 14) use of biologicalthe case of gherkins as almost the entire production
insecticides, 15) improved pesticide applicationfrom India is exported and there is no local market.
efficiency, 16) adapting promising technology, includingHence contract enforcement has not been a major
the use of infrared scanners, satellite photos,challenge as in the case of other commodities where
gene-splicing biotechnology, and new pesticidethe export intensity is much lower and the majority
delivery systems that incorporate farm-specificof production is consumed domestically.
information on tractor mounted computers. PesticideUntil recently, contract farming was illegal in India as
Limits and Regulation: Approval for use of anyper the provisions of the APM Act. The only way
pesticide in a country is subject to its safetyentrepreneurs can legally enter into contract farming
evaluation. Safety levels for any pesticide arewith farmers is to obtain a special waiver from the
calculated over a number of formal assessments. TheAPM Act from the State Government. The new
Codex Alimentarius Commission is an internationalmodel APM Act provides the legal framework and
body which sets international guidelines on manyguidelines for contract farming. The provisions in the
elements of food safety, including pesticides residuesmodel Act allow contract buyers to directly purchase
on food. These guidelines are not mandatory, butcommodities from farmers under individual contracts
many countries in Asia use these guidelines,or from farmers' markets. It also allows the direct
sometimes with additional scientific data determinedsale of farm produce at the farmers' fields without
by their national regulatory agencies to establish limitshaving them routed through regulated markets.
on use and also acceptable residue levels at point ofAdoption of the model Act by state governments
sale. Acceptable Daily Intake: One of the mostwill therefore facilitate not only more efficient
important tools in the safety evaluation of pesticidemarketing, but also improved food safety and the
use on food crops is the calculation of what is anadoption of improved agricultural practices. Weak
Acceptable Daily Intake (ADI). The ADI for any givenExtension Systems. The public agricultural extension
pesticide is a measure of the quantity of a particularsystems at the state level are very weak and have
chemical in food that can be consumed daily over anot effectively caught up to the changing needs of
lifetime without any known risk to health. It isfarmers and the market (World Bank 2005b). In view
expressed in relation to bodyweight. ADI is derivedof the GOI's earlier concentration on food
by first conducting diet trials on laboratory animalsself-sufficiency, the state-level Department of
and observing the maximum level of pesticide thatAgriculture (DoA) extension systems generally
can be consumed by the animal with no observablefocused on cereals, particularly rice and wheat, with
adverse effect on health. This level expressed asan emphasis on the transfer of improved varieties
percentage of body weight is known as the Noand management practices. The weak coordination
Observable Adverse Effect Level (NOAEL or NOEL),between the state DoAs and the other line
The investigations include checks for birth defects,departments (e.g. Departments of Irrigation,
cancer, reproductive changes, damage to theHorticulture, Livestock, Marketing, etc) and the limited
nervous system, harm to organs such as the kidneystaff capacity beyond the Department of Agriculture
or liver, and many other measurable health indicators.also often translated to limited extension activities
A safe level for human consumption is estimated bybeyond cereals, limiting its impact on agricultural and
dividing the NOAEL on humans by an uncertaintymarket diversification trends. The weak coordination
factor (usually 100) to allow for the possibility thatwith research at the central level further increased
humans may more sensitive than the animals usedthe difficulty of ensuring effective
for testing and also to account for possible variationresearch-extension-farmer linkages at the state level.
in sensitivity to the pesticide between humanIn many states, tight fiscal constraints contributed to
individuals, for example adults and children. Thesethe breakdown of the state extension machinery
results in an ADI for humans which is 100 times lower(Hanumantha Rao 2003). Private extension provision
than the NOAEL consumption rate established from(fee for service) is emerging. There are an increasing
trials on laboratory animals. Acute Reference Dose:number of input suppliers, traders, contract buyers,
Safety evaluation of all pesticides also requires ansupermarkets, and exporters which provide extension
estimate of the acute refrence dose (ARfD). Theservices to farmers as an integral part of their
ARfD is an estimate of the amount of a substance intrading arrangements (World Bank 2005b). However
food or drinking water expressed as percentage ofin the national context, private extension remains
body weight, that can be consumed over a shortlimited. The findings of a World Bank agricultural
period of time, usually one meal or one day, withoutmarketing survey, covering 1,579 farmers producing
any known effect on health. This figure is alsohigh value crops (tomatoes, potatoes, mangoes,
expressed as a percentage of body weight.maize and tumeric) in four states in India (Orissa,
Maximum Residue Levels: A maximum reside levelsTamil Nadu, Uttar Pradesh, and Maharashtra)
(MRL) is the maximum permissible quantity ofconducted during February to May 2005, confirm the
pesticide that may still be present on the crop atlimited effectiveness of the national extension
point of sale. It is derived from an assessment of thesystem. Farmers primarily depended on personal
residues found when the crop is treated according toobservation or on other farmers for information
good agricultural practices. The MRL is the maximumabout crop prices, post harvest practices, irrigation,
concentration of a pesticide residue that is legallyfertilizer and pesticide use (Table 2). Although food
permitted in, or on, a food commodity, and is set bysafety concerns have not been a major focus in the
national governments if the approval is given for theextension program, it is partly addressed through the
use of the pesticide on specified crops. MRLs are setincreased Ministry of Agriculture (MoA) priority to
to determine legal trading limit, and are not anintegrated pest management (IPM). MoA established
indicator of risk to health. MRLs are set at levelsthe National Center for Integrated Pest Management
which would result in consumption of any residue at ain1988 to develop and promote IPM technologies.
level substantially lower than the ADI or the ARfDNotably there has been a decline in total pesticide
for the pesticide, and any pesticide whose MRL couldconsumption in India from 75,000 mt in 1990/91 to
result in dietary intake which might exceed the ADI48,400 mt in 2003/03 (Directorate of Plant Protection
or ARfD would not receive approval. Pesticideand Quarantine 2006). Poor Infrastructure and
Residue Monitoring: Under FFDCA, the Food and DrugServices in the Marketing System. Reducing food
Administration (FDA) and USDA share responsibilitysafety risks from the farm to domestic and export
for monitoring levels of pesticide residues on foods.markets is constrained by inadequate infrastructure
FDA enforces pesticide tolerances for all domesticallyand facilities, particularly at the wholesale markets.
produced food shipped in interstate commerce and inThe World Bank Agricultural Marketing Survey also
imported foods, except for meat, poultry and somecollected information on the operations of 78
egg products, which are monitored by USDA. Manywholesale markets in the four states. The survey
agriculturally-intensive states such as California andfound that the infrastructure and facilities in these
Florida also conduct extensive pesticide residuemarkets are limited and rudimentary. Overall,
monitoring programs. FDA uses three approaches forMaharashtra and UP had slightly better infrastructure
pesticide residue monitoring: 1) incidence/levelthan the other two states. About 83% of markets
monitoring, 2) regulatory monitoring, and 3) Total Diethad covered shops, but only 18% had paved roads
Study (FDA, 1994). Total Diet Studies: To assesswithin the market and 51% had public toilets. Access
potential health problems from contaminants, bothto warehouses is limited, except in Maharashtra
natural and man-made in the food supply, the WHO(85%). Less than 40% of markets had a drying area
recommends total diet studies (TDS) as the one ofand no markets in Orissa or Uttar Pradesh had cold
the most cost-effective means for assuring thatstorage facilities (compared to 5% in Tamil Nadu and
people are not exposed to unsafe levels of toxic20% in Maharashtra).
chemicals through food. TDS provides an additionalTable 2: Farmer Sources of Information.
tool to assess whether or not any pesticides may beWaste management and pest control in the markets
present in the diet at levels which might pose a riskare very weak. Officials working in the wholesale
to health. A TDS is conducted by purchasing throughmarkets were asked how the spoiled produce and
standard retail outlets a typical selection of foodswaste products were disposed off. Fifty-four percent
commonly consumed in the country or region. Theresponded that market employees or contracted
'basket' of foods is processed and prepared as if forfirms handled garbage disposal and waste
normal consumption and then analysed in themanagement; 29% reported that they were just left
laboratory to measure total levels of the substancesto rot in the market, while 13% reported that they
of interest, for example pesticides. Drinking waterwere left for the animals to eat. Market officials
and water used in cooking are also included in thewere also asked about the pest control measures
assessments. The TDS provides a measure of thethey undertake. Fifty-nine percent indicated that no
average amount of the pesticide consumed byparticular control measure for rats and insects are
different age/sex groups living in a country. See boximplemented in their market, 32% indicated it was up
for an example of an actual TDS and results forto the individual shop owners to take care of their
estimate of pesticide consumption. Risk Calculation:rat problems. Only 8% reported the market
Risk = exposure x toxicity. Risk of harm from amanagement or association or a subcontracted firm
chemical depends on both the level of exposure totook care of rat problems. Reducing food safety
the chemical and on the toxicity of the chemicalrisks will require significant public and private
(Chaisson et al., 1991). Therefore, to quantifyinvestments to upgrade the market infrastructure
potential risks from consuming minute quantities of aand services. For regulated markets, this will also
particular chemical residue in food, scientists considerrequire improving the operational and fiduciary
the toxicity of the chemical, the residue content ofmanagement to ensure that more resources are
foods and the amounts of these foods eaten byre-invested back into the markets.
population subgroups. Population subgroups such asCultural Issues. Religious beliefs further constrain the
infants, children, women, women of child-bearing agekinds of food safety measures that could be
and ethnic subgroups may be considered in riskadopted in India. The sacred value attached to cattle
assessments in addition to the total population. Theimposes limits on disease control measures to
groups considered depend on the toxicologicaddress food safety and public health (BSE, foot and
characteristics of a particular chemical. Riskmouth disease), such as culling to limit disease spread
assessments that consider regional and seasonalor to create disease free zones. Inadequate grades
variations also are performed. Exposure = residueand standards for the domestic market and poor
concentration in food x amount of food consumed.enforcement. The Directorate of Marketing &
Potential exposure to a chemical in a specific food isInspection under the Department of Agriculture and
assessed by multiplying the residue concentrations inCooperation is responsible for enforcing and
food times the amount of food consumed by eachimplementing the Agricultural Produce (Grading and
person in the population. This exposure is expressedMarking) Act. Its mandate includes promoting
as milligrams of residue per kilogram of body weightstandardization and grading of agricultural products.
per day (mg/kg BW/day). Potential dietary exposureGrades and standards have been prescribed for 164
to a chemical is assessed by adding together residuecommodities under the APM Act for domestic trade,
intakes from all foods. Different assumptionsfor export trade and for grading at the producer's
regarding residue concentrations in food may be usedlevel. The AGMARK grades are primarily voluntary
to assess exposure. A worst-case exposure scenariogrades covering aspects such as size, variety, weight,
may be calculated using tolerance levels for pesticidescolor, and moisture levels. For certain items they also
in food. This exposure assessment is the theoreticalcover parameters such acceptable levels of organic
maximum residue contribution. Exposure may also beand inorganic foreign matter (in pulses, for example)
calculated using anticipated residue levels (Chaisson etand other chemical properties such as specific gravity
al., 1991; California Agriculture,1994).for essential oils. Different grades and standards are
5. Food Safety and the Indian Domestic Marketlaid out under AGMARK for domestic consumption
Increasing incomes, urbanization, and literacy,versus exports. The Directorate provides third party
improved infrastructure and closer ties to globalcertification under the AGMARK quality certification
trends, especially during the last decade, are drivingscheme. The 'AGMARK' seal is supposed to ensure
changes in consumer demand and preferences inquality and safety. Any consumer, trader or
India. Sustained economic growth (6.0% per year inmanufacturer can have products tested at one of
real terms from 1990/91 to 2003/04) resulted in GDPthe 23 regional AGMARK laboratories for designated
per capita increasing by about 70%, from aboutcommodities. Typically, testing is only carried out for
US$315 in 1990 to US$538 in 2004 (constant 2000adulteration prone commodities such as oils, ghee,
dollars). National poverty rates (headcount) declinedwhole and ground spices, honey, and whole and milled
from 38.9% (Central Statistical Organization 2002) infood grains. Blended edible vegetable oils and fat
1987/88 to 28.5% in 1999/00 (Deaton and Drezespreads are compulsorily required to be certified
2002).3 The middle class, which now accounts forunder AGMARK. The Prevention of Food Adulteration
about 15% of the 1.2 billion people in India, is theAct also sets standards for food products including
fastest growing income group and is a major forceaspects such as permissible food colorings,
shaping the diet revolution that is occurring (Landespreservatives, pesticide residues, packaging and
and Gulati 2003).labeling. As illustrated by the bottled water and soft
Figure 2: Diversification on Food Consumptiondrink pesticide residue incidents, inadequate standards
Expendituresand weak enforcement remain a problem. The
These structural changes are reshaping consumergrades specified under AGMARK and standards as
demand. The Indian food consumption basket islaid out in the PFA are designed to facilitate trade as
diversifying away from cereals towards higher valuewell as ensure food safety. The food safety
and more perishable products, such as fruits andstandards under the PFA in general need to be
vegetables, dairy, meat and fish (Figure 2). Increasingaligned with international standards. However there
female participation in the work force and higherare many commodities that are not grown or
disposable incomes to spend on non-home cookedconsumed outside of India. For these commodities it
foods are driving growth in demand for prepared andmay not be possible to align domestic standards with
semi-prepared foods, and thus the growth of theinternational standards because there are no
processed food industries (Pingali and Khwaja 2004).established international standards. In these instances
These trends bring increased attention to safetyit is important for research to be conducted in India
concerns in the handling, processing and marketing ofto set appropriate standards for the domestic
foods. In addition, growing consumer preference formarket. Lack of pro-activity in addressing
shopping convenience, increased exposure to thefood-safety issues. Domestic food safety scares and
media (TV, cable and the internet) and ownership ofthe more notable food-safety problems faced by
durables such as refrigerators and cars are fosteringIndian agro-exports, reveal the overall absence of
the growth of modern retailing (i.e. supermarkets andany pro-activity in addressing food safety concerns in
hypermarkets), which in turn demand greaterIndia. Several factors contribute to this. In the case
efficiency and food quality and safety standards inof exports, many if not most of the emerging SPS
the supply chain Mukherjee and Patel 2005,and international standards are widely viewed as not
Chenggapa, et al 2005). Increased vigilance by NGOs,scientifically based and as representing unfair "barriers
consumer groups, and local research institutes is alsoto trade" (World Bank, 2006b). These measures are
raising awareness and spurring action amongviewed as efforts to protect foreign farmers or
consumers and policy makers to address food safetyprocessors from competition, or are being fueled by
risks. Findings of high levels of pesticides in bottledunreasonable consumer fears in high income countries
water and soft drinks in 2003 by the Centre forand improved technologies for detecting hazards.
Science and Environment (CSE), an NGO, shook theConsequently, the approach of the government and
country and forced the Government of India (GOI)private sector has been to try to negotiate away
to take swift action (Mathur et al 2003, CSE 2004).the problems with trading partners and, failing that,
The CSE tested 30 bottled water brands from theaddressing the various measures in international
major cities of Delhi and Mumbai in Maharashtra andstandard-setting or dispute flora. As a consequence,
found that all except one contained pesticideinsufficient attention is devoted to monitoring the
residues.requirements of official and private standards,
Figure 3: Pesticide Residues in Soft Drinks in India,interpreting their implications for Indian agriculture and
2003using current and anticipated requirements as
The Delhi brands on average contained pesticidecatalysts to upgrade existing operations and
residues 36.4 times the maximum pesticide residuesstrengthen supply chain management (World Bank
stipulated by the European Union standards for2006b). This absence of pro-activity has meant that
bottled water (CSE 2004). Shortly thereafter, MathurIndia has either had to adopt a "defensive" strategy
et al. (2003) tested 12 brands of soft drinks sold inavoiding markets with more stringent food safety
Delhi for 16 organochlorine and 12 organophosphorusand agricultural health standards or launch into a
pesticides and 4 synthetic pyrethroids commonlyfire-fighting mode when it faces potential disruption
used in agricultural fields and homes in India. Theiror loss of trade due to noncompliance with
analysis found that all brands exceeded the EUstandards.17 The absence of pro-activity is well
maximum pesticide residue limit of 0.0005 ppm (Figureillustrated through examples of problems faced with
3). To deal with the back-to-back crises, the GOIexports of fishery products in the late nineties and
established a special Joint Parliamentary Committeethe more recent troubles with grape exports to
on "Pesticide Residues in and Safety Standards forEurope. In both cases, although there were signs of
Soft Drinks, Fruit Juice and Other Beverages" inpotential problems for a considerable period of time,
August 2003 to investigate the allegations. Two GOIthe food safety problems were not given serious
Laboratories were instructed to conduct tests on theattention until India was faced with a crisis. In the
12 brands (but using different samples) and theircase of exports of fish and fishery products,
findings showed that 9 of the 12 samples exceedednecessary monitoring and enforcement measures for
the EU limits (Hindu Business Line 2003). Weakensuring that exports complied with food safety
regulations and inadequate standards were majorconcerns were not put in place until the loss of EU
causes of these high profile food safety crises. In themarkets in 1997 (Henson, Saqib and Rajasena, 2005).
case of bottled water, while the existing norm setThis was despite the fact that India had continually
out by the Bureau of Indian Standard (BIS) requiredfaced rejections because of failure to meet hygiene
that "no pesticides should be detectable," thestandards and other food safety requirements since
prescribed methodology could only detect pesticidesthe 80s, and in spite of regulatory reforms to
at extremely high levels. Consequently, GOI issued aprovide safety assurance for fish and fishery
notification revising the standards for pesticideproducts undertaken in 1995 (Henson, Saqib and
residues on bottled water, adopting the EU singleRajasena, 2005). Similarly, in the case of grape
residue limit of 0.0001 ppm and multiple residue limitexports to the EU, pesticide residue problems had
of 0.0005 ppm (CSE 2004). In the case of softsurfaced since the late nineties. During this period,
drinks, the BIS only had voluntary standards, notsome limited testing was done for pesticide residues
mandatory standards for pesticide residues. Toin export-oriented grapes. Testing was made
address the problem, BIS constituted a 39 membermandatory in 2000, but most of the available testing
committee, consisting of representatives from theequipment was not up to date, could not test to the
soft drinks industry, government scientists, NGOs andsame level of detection as was common in Europe
consumer groups to formulate the new BISand was unable to detect certain heat-sensitive
standards. The outcome was the Indian Ready tochemicals such as acephate and methomyl (World
Serve Non-Alcoholic Beverages Specifications, whichBank, 2006b).18 Only after EU Rapid Alerts were
established the limits for 16 pesticides in the finishedissued in 2003 did the Government and industry step
product (0.0001 mg/l for individual pesticides and totalinto action to address the problem. In general India
pesticide residue limit of 0.0005 mg/l) (CSE 2004).has not viewed complying with food safety and
Even the government-sponsored Mid-day Mealsagricultural health standards as a means to both
program encountered serious food safety incidents.improve its competitive position and to enhance the
The National Program for Nutritional Support toeffectiveness of its negotiations on particular
Primary Education (NPNSPE), more popularly knowntechnical and commercial matters, which is in stark
as the Mid-Day Meals Scheme, aims to improve childcontrast to the approach of leading agro-food
enrollment in primary school and encourage regularexporting countries (World Bank, 2006b). A
attendance by providing supplementary feeding, whileconsequence of the lack of pro-activity and the crisis
improving their nutritional status. It covers childrenmanagement mode of operation has been the
enrolled in classes I to IV in government andadoption of very rigorous and strict controls for
government-aided schools in the whole country (Jhacommodities threatened with the loss or disruption of
and Umali-Deininger 2003). In June 2006, 85 studentstrade. This has led to extremely high costs of
from a Chennai primary school were admitted to thecompliance in some cases (e.g. grapes) (World Bank,
hospital because of food poisoning after consuming2006b) or rather onerous requirements (e.g.
food prepared under mid-day meal scheme.4 Inrequirements for processing facilities exporting fishery
February 2004, 281 children attending municipalproducts) (Henson, Saqib and Rajasena, 2005). In the
schools in Delhi fell ill and were admitted to thecase of grapes, the Government of India (GOI)
hospital after consuming their mid-day meal.5 ThereAgricultural and Processed Food Products Export
have been many other cases, despite quality normsDevelopment Authority (APEDA), formulated an
being established for the mid-day meal program.integrated system of intensive grape supply chain
While issues related to pesticides in bottle water andoversight that included • A requirement that
carbonated drinks, and out-breaks of food-borneall farms growing grapes for export to Europe have
illnesses received wide media attention, there areto register with the Department of Agriculture. About
other serious domestic food safety concerns that6200 growers registered for the 03/04 season;
have been identified including heavy metal• Three field inspections (for registered
contamination in foods. Marshall, et al. (2003), testedexporters) during the crop cycle by a newly
fresh cauliflower, okra, and spinach - commonconstituted cadre of horticultural field inspectors.
vegetables in the Indian diet - in 5 production sitesSome 244 such officers were initially appointed and
around the Delhi region and in Delhi's Azadpurtrained. There are now 291 such officers; •
wholesale market from May 2001 to June 2003. TheyThe inspection and registration of all grape export
found that 72% of the 222 spinach samplespackinghouses by APEDA. • Mandatory
exceeded the Indian MRLs for lead of 2.5 mg/kg, andpesticide residue testing from each registered field of
100% exceeded the Codex MRL of 0.3 mg/kg. Theyexport grapes. Testing would be done prior to
attributed the high lead content to a number ofharvest and only if the tests were passed would
possible causes, including contamination of theauthorization be given for harvesting for export.
irrigation water by sewage and industrial effluent andGrapes from fields with failed results would need to
industrial pollution.6 Contamination was exacerbatedbe sold in other markets or re-tested. •
by their locations-the production sites and marketEvery consignment would be checked by AGMARK
were in peri-urban and urban areas. When tested forto ensure conformity with EU quality specifications
zinc, 21% of samples exceeded both the Indian andfor grapes. AGMARK would issue certificates.
international standards. Currently, however, no regular• Obtaining a phytosanitary certificate issued
testing for heavy metals in vegetables is undertakenby Plant Protection, Quarantine and Storage for
by government agencies in India. Tests undertakenevery consignment; and • Later, in 2005,
by the Indian Council for Agricultural Research foundanother procedure was added whereby National
pesticide residues above the MRL in 5.3% of 666Research Center for Grapes would take a 5%
samples of vegetables in 2003 and 15% of 468sample of ex-packhouse grape consignments to
samples of milk tested in 2001 (Directorate of Plantre-test for pesticide residues. The extensive system
Protection and Quarantine 2006). The long term useof checks and controls primarily focused on
of pesticides in agriculture and for disease controlend-of-the-pipeline solutions. In addition to the
(e.g. DDT for malaria control) is manifesting itself inprotocols that potential exporters to the EU have to
the blood, human milk and fatty tissue in thefollow, the government also invested heavily in
population in many states. Table 1 presents theupgrading laboratory testing equipment, training field
results of micro-research studies in selected states ininspectors, subsidizing packhouse upgrades, and
India from 1980 to 2005.strengthening the National Research Centre for
Table 1: Level of DDT and HCH Content in HumanGrapes. Overall, it is estimated that the cost of this
Blood Samples in Selected States in India. Locationcontrol system for pesticide residues (to government
Year Number of Samples Total DDT (ppm) Totaland the private sector) is about US$1.2 million,
HCH (ppm) Lucknow, Uttar Pradesh 1980 25 0.020equivalent to 7.9% of the FOB value of India's grape
00.022 Delhi 1982 340 0.710 0.049 Lucknow, Uttartrade to Europe in 2005 (Table 3). If all other costs
Pradesh 1983 48 0.028 0.075 Delhi 1985 50 0.301 -associated with the oversight of the grape supply
Ahmedabad, Gujarat (rural) 1992 31 0.048 0.148chain are added to the costs of pesticide residue
Ahmedabad, Gujarat (urban) 1997 14 0.032 0.039testing, SPS compliance costs are estimated to
Punjab (rural) 2005 20 0.0652 0.057 Note: HCH -account for 13% of this FOB value.
Hexachlorocyclohexane Source: ICMR 2001, Mathur etTable 3: Estimated Annual Cost of Meeting EU SPS
al. 2005.Standards-2005 US $
6. Food Safety Concerns in Indian ExportsWhile it is arguable that there are many spillovers and
Increased globalization and liberalization of markets,important lessons that have been learned from the
facilitated by the World Trade Organization (WTO),handling of the pesticide residue problem with grape
are opening new export markets for Indianexports, and that these measures have been
agricultural products, both fresh and processed. Indian"successful" in that they have not resulted in further
agricultural exports grew at an average annual ratealerts or rejections, the heavy handed approach with
of 7.2% from 1990/91 to 2003/04. In response towhich the problems were addressed, and the costs
these new opportunities, India's agriculture exportsinvolved, clearly suggest that it is not a strategy that
diversified from traditional exports of tea, spices, andshould be replicated. Although India has not faced
coffee to include horticultural, fish and livestockfurther rejections of exports to the EU, routine
products. Between the triennium ending (TE) 1991/92laboratory testing still reveals violative residues,
and TE 2003/04, the value of fresh and processedindicative of the continuing need to focus on
fruit and vegetable exports rose from US$84 millionimproving overall agricultural practices to assure food
to US$394 million in real terms (1993/94 dollars) whilesafety. Lack of good agricultural, manufacturing and
marine product exports rose from US$516 million tohygiene practices. In addition to constraints that arise
US$1.5 billion during the same period (Figure 4).due to small farm sizes, the lack of good agricultural,
As Indian agricultural exports diversified, and themanufacturing and hygiene practices remain a major
value of exports to high income countries increased,challenge for improving food safety both for the
India has had to confront new food safetydomestic and export market. It is only recently that
challenges. Concerns over numerous rejections ofefforts are being made to promote good practices.
Indian agro-food exports on food safety groundsFor example, Marine Products Export Development
have spilled over domestically, generating greaterAuthority (MPEDA) promoted codes of good
domestic attention to pervasive food safetypractice, particularly with regards to addressing
problems in the supply chain including high levels ofantibiotic use. To this extent the organization was
pesticide residues, presence of heavy metals in food,involved in monitoring antibiotic usage levels, providing
and micro-biological contamination. The followingtraining and disseminating information (Henson, Saqib
section describes recent food safety challenges inand Rajasena, 2005). In the spices sector, the Spices
Indian horticultural, spice and fisheries exports.Board (SB) undertook measures to address problems
Figure 4: Trend in Agricultural Exports, Trienniumwith regards to pesticide residues and aflatoxin. The
Ending (TE) 1990/91 to TE 2003/04SB, in conjunction with State Departments of
Horticultural Exports. In 2004, India exported US$575Agriculture and various NGOs, supported measures to
million of fresh and processed fruits, vegetables andpromote integrated pest management (IPM) and the
flowers. Traditionally India's fresh fruit and vegetablesproduction of organic spices (Jaffee, 2005). They
exports were targeted to markets in neighboringhelped address the aflatoxin concern by promoting
South Asian countries, to the Middle East and to Eastbetter drying practices. The Ministry of Food
Asia. Since the early 1990s India achieved someProcessing Industries and APEDA have both been
success in exporting fresh horticultural produce topromoting adoption of HACCP and ISO certification
Western Europe. India has been quite proud of itsamong processed food manufacturers through a
penetration into the U.K, Netherlands and Germanrange of training initiatives and private sector
fresh grape markets. Grapes are a highly seasonalinvestment grant for upgrading processing plants to
crop and Indian exporters have been targeting aobtain HACCP/ISO certification. However, the
crucial March to April window in the European market,adoption of good practices remains limited. Much
which falls at the end of the main southernremains to be done in improving practices with
hemisphere production season (in South Africa andregards to the manufacture and use of pesticides
Chile) and before Egypt and Turkey enter theand improving post harvest techniques. Although
market. Virtually all of India's grape exports are ofthere have been some limited spillovers from the
the Thompson Seedless variety. The Indian grapeexport sector into the domestic market, in terms of
export crisis in May 2003 was a pivotal wake-up callimproving production practices, for most
to Indian exporters concerning the costs of failing tocommodities, including spices and fresh fruit and
meet food safety standards. In the midst of avegetables, farmers do not necessarily see any
commercial dispute with an Indian grape exporter, aadvantages or necessity for altering their production
Dutch importer had samples of the Indian grapespractices since the vast majority of production is
tested by a private laboratory. On finding that theconsumed in the domestic market. Until domestic
grapes contained residues of the insecticideconsumer awareness and willingness to pay for
methomyl in excess of the EU maximum residue limitimproved food safety becomes more widespread, it
(0.05 microgram/kg.), the importer placed anis unlikely that addressing food safety concerns will
advertisement in the local paper warning that grapesbecome standard practice nationally. Similarly,
from this Indian supplier contained "poison" (Worldsignificant measures are needed to improve the
Bank, 2006b). Dutch authorities, who were alertedsafety of processed foods. In the food processing
about the finding, tested samples from the 28sector there are a growing number of firms with
containers of Indian grapes then in Rotterdam portmodern factories and good quality assurance
and found that about 75% of the samples exceedsystems, but this segment co-exists with large
the MRLs for methomyl and/or acephate.7 Thenumbers of small and older firms that would need to
problem was reported on the EU Rapid Alert system,make significant upgrades to implement HACCP and
causing not only significant short term economicother quality assurance systems.19 In the short term,
losses, but also considerable longer term reputationdevelopments in the food retail sector in India are
damage. The price of Indian grapes dropped sharply,likely to bring about improvements in food safety.
and the Indian grape shippers incurred losses, either inInternational experience shows that modernization of
Dutch sales or by diverting the shipments to otherthe food retail sector is an important driver for
markets.change not only in the structure of production and
Spice Exports. India is the world's largest consumerwholesale marketing of produce, but also in fostering
and producer of spices and is also a significantadoption of improved grades and food safety
exporter of spices (Jaffee, 2005). In 2004/05, India'sstandards (Berdegué et al 2003, Reardon and
spice exports totaled US$399 million. India, however,Timmer 2005a, 2005b). Despite the ban on foreign
has encountered a number of food safety problemsdirect investments in food retailing, the supermarket
in its spice exports including high pesticide residues,industry is growing rapidly, driven by investments
aflatoxin contamination and the use of prohibitedfrom the Indian corporate sector.20 Many of the
food colorants. In the mid-nineties, Indian dry chilimodern retail outlets are beginning to undertake
exports faced several rejections including rejections indirect procurement from individual farmers or
Spain due to pesticide residue in excess offarmers' associations. In some cases farmers or
permissible MRLs, and in the United States becauseassociations supplying these outlets are required to
residues of quinalphos, a pesticide not registered infollow a code of practice to meet quality and safety
the United States (Jaffee, 2005). Between 1998 andrequirements of their buyers.