23 Nov 2019

The food processing sector is one of the largest employment creators, especially of non-farm jobs in rural areas. It boosts farm incomes, reduces agri produce wastage, and contributes to exports. CII recommends several measures to boost this important sector.

Short-term Measures

1. Rationalization of GST Rates: A GST rate of 5% for perishable food items and 12% for non-perishables would help control inflation and address anomalies in rates between food items of similar nature.

2. Plastic Waste Management Rules: The Government of India notified the Plastic Waste Management Rules in 2016. Additionally, various State Governments have their own directions and mandates regarding buy-back mechanisms, creating multiple compliance requirements for the industry.

CII suggests the development of a national framework on ‘Extended Producers Responsibility’ with a national accounting system for plastic waste. The system should be geography and brand neutral, to help businesses simplify their operations.

3. Regulatory Issues

• The Advertisements and Claims Regulation to be implemented shortly requires compliance with the definitions of words and phrases such as fresh, natural, pure, etc. These are very subjective and would create ambiguity at the enforcement level. This issue needs to be addressed.

• Labeling and Display: The Food Safety and Standards Authority of India (FSSAI) issued the Food Safety and Standards (Labeling and Display) Regulations on 2 July 2019. Some of the provisions in the draft have significant implementation challenges.

• The proposal for GDA (Guideline Daily Amount) front- of-pack labeling proposes a color-coded mechanism, based on thresholds of fat, salt and sugar for various food categories. The GDA is a voluntary system widely adopted across the globe.

However, the draft issued by the FSSAI has an additional proposal of color-coded GDA based on thresholds from the WHO SEARO (South East Asia Region) model. The primary objective of the WHO SEARO model was to set thresholds for nutrients like fat, salt and sugar in a food product to assess its suitability for marketing to kids (voluntary).

These thresholds have a huge impact on the food processing industry and are far too stringent, impractical in many cases, and could potentially lead to a vast majority of packaged foods and beverages in India, including foods that are good from a nutrition point of view, being categorized as ‘High Fat Sugar Salt’ (HFSS) and color-coded ‘red’.

CII has suggested an alternative approach for front- of-pack labeling, highlighting category-wise gradual reduction, based on current market baseline data that could be collected across geographies.

• Food Testing System: Each State laboratory must be part of the National Accreditation Board for Testing and Calibration Laboratories (NABL), and should participate in a proficiency test for accurate and credible results.

Medium-term Measures

4. Supply Chain Inefficiencies

• Create seamless post-harvest infrastructure to address supply chain inefficiencies.

• Multiple licenses and authorities are involved for setting up cold chain infrastructure across the States. The regulations for these vary from State to State. Model

guidelines should be framed to make the statutory requirements uniform across all States.

5. State-level Reforms (Model Food Processing Policy) The Ministry of Food Processing Industries has devised a model National Food Processing Policy. The adoption of this model policy by the States would help in prioritizing and streamlining policies and procedures for food processing industries across the country.

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