FE Editorial : Milky way

Written by The Financial Express | Updated: Sep 30 2008, 03:51am hrs
India's newly set up but barely noticed Food Standards and Safety Authority (FSSA) has made its presence known by asking for a temporary ban on milk product imports from China. India joins other countries and the EU in responding to Chinas melamine-spiked milk scandal. India would do well though to understand that in the global economic matrix it faces similar risks as China. All rich countries, when going through economic transformation, have had periods where regulation had to play catch up. America in the early 20th century was a good example of economic energy and regulatory infancy. The problem with India and China is that the very system that has helped them grow fastglobalisationalso reduces places to hide when it comes to quality lapses and plus it can deliver big penaltiesthe souring of a countrys manufacturing reputation can really hurt its global business after a point of time, no matter how crucial low cost imports are for the West. China has had two major scandals nowpet food and milkand seems primed to take a biggish economic blow should another surface. Indias pharma exports have had problems, not anywhere near the scale Chinas products have engendered, and there has been occassional reports of problematic Indian exports.

Of course, the fact that India is an open society and China isnt, helps. Chinas official responses always seem to subordinate consumer interest to some national goal. In India that would be a tough task for a government. But that check comes post-scandal. Indias food safety regulation was horrendously chaotic until recentlyeight laws and several ministries, all working against each other. The FSSA and the new food safety law that set it up have made regulation a single agency job and intend to bring much more science into the system of checking food safety. Thats obviously good but the FSSA should start recognising some problems soon. First, three-tier systems at the Centre wont do the trick unless it has an efficient, well-paid, well-trained inspection force. Another classic inspector raj will simply mean more bribes and no better quality control. Second, simply mandating standards for final products wont doraw materials and intermediate products need to have standards as well. Whats the point of regulating beverage standards if theres no water standard