Chordias form research foundation

Pune's Chordia group is a small business house. But when it comes to planning for the future, it believes in thinking big. Last month, the group, a mid-sized player in the pickles, spices, snacks, sauces and spice paste business, created the Agri Food Research Foundation of India, an information, education and research centre for the food industry. This is perhaps the first such private sector food industry initiative in the country.

The motivation? The imminent World Trade Organisation regime, which will come into effect from January 2001, and for which, according to Pradeep Chordia, managing director, Chordia Food Technologies and Chordia Food Products Ltd., India is ill prepared.

Come 2001, and India, which is a signatory to the WTO, will have to abide by the WTO stipulations on trade. As a result, the country will have to throw open its trade to the world market. Traditional territorial barriers will be slashed, making way for free trade. The country will no longer be able to stop imports. Tariffs too will be minimised and product movement will be unrestricted.

The implications are far reaching. Large players from anywhere across the world will enter the country and sell their produce here. "We may even find ourselves routinely selling sugar in Pakistan, and buying their wheat," says Chordia.

Globally, however, while traditional barriers will come crashing down, new ones will come up, warns Chordia. Most of these will benefit the developed countries and hurt others. "These will be in the form of manufacturing and processing standards, specific quality or hygiene requirements, or ecological- and environment-related restrictions. All food and food products will be bound by the Codex laws -- standards laid down by the Food and Agricultural Organisation -- and HACCP (hazard analysis critical control points) requirements as specified by WTO.

"Unless we are fully geared to meet these conditions, Indian firms are likely to be wiped out by major multinationals from developed economies," says he. "Each manufacturer will have to comply with these standards, to sell his goods. Without them, we will not be able to sell." He says. This is a serious problem in India, where the food industry is dominated by small firms, small farmers and small food processing entrepreneurs without the wherewithal to equip themselves to meet the challenge.

"It's not just a matter of resources, we even lack the awareness," says Chordia. "We are lagging behind in so many areas. We do not have enough experts in this field. Even the government machinery is under-prepared. It is not in a position to guide our farmers, or our food processors on how to be ready for the changes. There is not even awareness about what the Codex laws and other requirements are, and about what way we, as a nation, need to do to prepare ourselves," says Chordia. Of immediate concern is the necessity to understand the new standards that will be imposed - the Codex Alimentaris, and the HACCP parameters in particular, he says.

These standards are all encompassing. From the method of growing the crop, choosing the seed or tissue strain, using the right kind of (read eco-friendly) fertiliser, to growing to the specified size, maturity or colour, to maintaining laid-down manufacturing and processing and end-product parameters, standards will have to be complied with, at every step.

"Once the WTO norms come into force, we may not be in a position to sell our products in the world market, if we are unable to meet their standards. We may be reduced to selling only in India, where, too, competition and better product availability could edge out the local producer."

By being a signatory to the WTO, India is committed to comply with the "sanitary and phytosanitary standards" which have already come into force in other parts of the world since January 1997. But this has not been adequately communicated to the Indian food industry. "One fine morning we will wake up and realise that the standards are effective even in India. Large companies and multinationals, being well -prepared, will not suffer, but the majority of Indian businesses, which have not geared themselves for it, will be affected," warns Chordia.

What needs to be done? "The only way is to build awareness and upgrade our systems of farming and processing on a war footing," says Chordia. "Even our own laws will have to be changed to meet the new requirements. We have to upgrade our research, and be prepared with scientific counter-arguments. We will have to prove our goods are as good and safe as products anywhere else in the world."

The Agri Food Research Foundation of India is the Chordia group's answer to this problem. "Our objective is to help India become an agro-economic powerhouse. Through this organisation, we wish to promote agriculture not as mere traditional activity, but as a business activity, with a clear rationale for output, input, specifications, and standards. The institution will help spread this message," says Chordia.

The endeavour has not come too soon. Despite the country being one of the largest producers of fruits and vegetables in the world, along with China and Brazil, it processes only 1 per cent of its agricultural produce, and exports of processed agro products are trifling. "Even Malaysia processes 70 per cent of its produce, and Indonesia processes 40 per cent," says Chordia.

AFRFI will be developed as an information bank, with all data relevant to the food industry, including international standards such as Codex, ISO, FAO /WTO, HACCP, and US-FDA requirements. It will be developed as a certification centre for international standards, quality and management systems. State-of-the-art R&D and testing facilities to ensure compliance with international standard will be made available at the institute.

The institute is planned to be a nodal agency for promoting agro-business, with facilities for assistance in carrying out feasibility studies, laboratory experiments, and even pilot project implementation. The institution will also help develop manpower skills required in the new regime through its various short and long term courses.

A separate focus area of AFRFI will be an intellectual property and patenting. "Ours is a country rich in its bio-diversity and a fund of traditional knowledge on this bio-wealth. It is important for India to preserve this knowledge and ethnic bio-information. All this has to be documented to protect intellectual property rights."

The project is expected to cost Rs 10 crores, and is slated to come up on the outskirts of Pune.