Financial Daily from THE HINDU group of publications
Wednesday, Mar 22, 2006
Agri-Biz & Commodities
Bio-tech & Genetics
Marketing - Standards & Benchmarks
Labelling of GM food: Imported soyaoil will suffer
Can rules trace?
Currently, Indian ports are inadequately equipped to test for GM traits.
The process of refining destroys trace of protein. Therefore, refined soyabean oil would not be amenable to detection of GM trait.
Mumbai March 21
, In an effort to restrict import of genetically modified (GM) foods, the Government has proposed certain draft rules and has sought objections and suggestions from stakeholders.
No import, manufacture, sale, storage, transport or distribution of any food product containing GM material will be allowed except with the approval of and subject to conditions that may be imposed by the Genetic Engineering Approval Committee (GEAC), constituted under the Environment Protection Act, 1986.
Importers of GM foods will have to produce GEAC clearance certificate at the time of import.
In an effort to usher in mandatory labelling of GM foods, the Union Ministry of Health and Family Welfare has issued a notification for amending the Prevention of Food Adulteration Rules, 1955.
A new Rule 37-E is sought to be introduced for mandatory labelling of GM food. The rule defines genetically modified or engineered organisms as composed of or obtained through biotechnology, or food and food ingredients produced from but not contained genetically modified or engineered organisms obtained through modern biotechnology.
Clearly, imported soyabean oil will come within the ambit of this new regulation if and when it comes into force. Last year, the Indian Council of Medical Research had called for mandatory labelling of GM foods.
Business Line first broke the news of the Government's intention to make labelling of GM foods mandatory (BL, December 8, 2005).
While soyabean and soyabean oil produced in the country are non-GM, imported degummed soyabean oil is mostly from GM soyabean. India imports a substantial part of soyabean oil from Argentina. In 2005, soyaoil imports were 20 lakh tonnes.
When the proposed amendment takes effect, a GM food, whether it is primary or processed or any ingredient of food, food additives or any food product that may contain GM material, shall be compulsorily labelled, without any exceptions. The label of all packages of GM foods shall indicate that they have been subject to genetic modification.
How the Government implements the proposed changes in PFA Rules remains to be seen. Currently, Indian ports are inadequately equipped to test for GM traits. In case of crude soyabean oil, there may be some trace of protein left in the oil for detection (when GM-oilseed is crushed most of the protein goes into the meal).
But the process of refining destroys that trace of protein. Therefore, refined soyabean oil would not be amenable to detection of GM trait. How refined soyabean oil imports would be treated is anybody's guess.
Obviously, importers would switch to refined soyabean oil instead of crude degummed oil. This would of course hurt large refineries that have been established (especially on the west coast) with the primary intent of refining imported crude soyabean oil.
The notification has serious implications for the country's vegetable oil market. It will have the effect of restricting soyabean oil arrivals into the country and push domestic oilseeds and oils prices higher. The intention of the policymakers may be to support domestic oilseed growers.
But, surely, from the point of view of domestic soyabean growers, the timing of the notification is faulty because most the harvested crop has already been marketed. Processors and traders would surely stand to make windfall gains with price rises, but not soyabean growers. It would of course send a positive message at the time of next planting in June.
The move will immediately reverse the import trend in favour of the palm group of oils, which has been rapidly losing market share in India. It should come as no surprise if palm oil prices, already firm on talks of biodiesel demand, rise further.
As the draft rules cover indigenous GM products, cottonseed oil crushed out of indigenously cultivated Bt. Cottonseed would also be covered.
How the Government would monitor import of food products prepared with soyabean oil and how they would be tested for GM traits is unclear. The draft rules may be challenged as non-tariff barrier on free trade.
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