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Why FDI in food sector is unhealthy?

Jul 04, 2014

The Indian govt should consider setting up a group of independent experts of integrity without any aid from industry for guiding the action to reduce dietary intake of sugar, writes Dr Arun Gupta.

Arun Gupta

New Delhi: Commonly written edit page stories in past few months by leading economists such as Swaminathan Aiyar, Arvind Panagriya, Ruchir Sharma and Gurcharan Das, rarely go beyond GDPs, need to create jobs, and foreign investment. I want to add ‘public health’ to this debate.

I want to focus on investment in the very attractive ‘food sector’, specifically on beverages. One Cola giant representative noted the Indian challenge: “Indians on average consume only 12 eight-ounce bottles of Coke a year compared with 230 in Brazil and 92 bottles globally”. PepsiCo announced its plans to invest 33000 Crore in a sugar-sweetened beverages plant with a capacity of 3.6 million liters per day in Andhra Pradesh, that would lead to 8000 direct or indirect jobs.

The Chief Minister legitimized this ceremony. However, there seems to be no attempt at estimating the short or long -term health impact of the consumption of such beverages, and its load on the health systems.

The debate on investment rarely touches “public health”.  The World Health Organization’s Director General highlighted two major concerns in her speech in Finland at a global conference on health promotion. She related to trade agreements the “dangerous trend” of corporations taking governments to court when they introduce public health measures. Secondly she said, “When industry is involved in policy-making, rest assured that the most effective control measures will be downplayed or left out entirely. This, too, is … dangerous.………..”

It is very well established that sugary drinks are unhealthy. According to WHO and leading science journals, consumption of unwanted sugar is directly related to more obesity, diabetes and deaths.  WHO limits the intake of sugar by an adult to 6 teaspoonfuls a day. A 300 ml can of cola contains about 9 teaspoonful of sugar. The Cola companies are silent about this and so are the Celebrities that promote these Colas.

It is well known that when cheap unhealthy foods with high sugar content are made available and heavily marketed to consumers, diet-related epidemics like obesity and diabetes escalate in spite of information and education.  There are growing calls to the governments to tax sodas and to restrict marketing of foods high in sugar, salt, saturated fats and trans fats and low in cereals and fibers. These are the foods that W.H.O. recommends to reduce consumption. All these products are usually routed through food supply chains of foreign direct investments (FDI).

According to information available, there is heightened interest and growth of FDI in agriculture in middle and low -income countries; beverage FDI in developing economies has increased four fold, and the processed food sector is among top ten sectors attracting FDI in India.

This extensive interest for investing in this area calls for considering the impact of such investment on public health. If the government gives in to investors for economic development, they would want unrestricted marketing and consumption of unhealthy foods would go up. In this case the government in fact becomes a ‘party’ to the “epidemic” of ‘unhealthy’ consumption. Therefore, there is “tension” between  government action to promote food security, healthy living by reducing consumption of unhealthy foods and beverages,  and action to promote economic growth by encouraging investment in the food and beverage sector. The World Health Assembly endorsed a global action plan 2013-2020 specifying the need to use policy measures to “discourage the consumption of less healthful foods” to which we are committed.

The question that needs to be addressed is while we take a look at the investment for economic gain, where shall we draw the line? The examples of legal cases by industry against some countries, which are seeking to implement policies to reduce smoking, are evidence of challenges to countries’ domestic regulatory autonomy even to protect public health.

Governments should acknowledge the health and nutrition risks of investments in the food sector, and share it with the people. Government should also reserve for themselves the power of regulation and policy space on public health. Agreements with investors in sectors related to health should be vetted by civil society and public health and nutrition experts groups, debated possibly in the Parliament Committees. Agreements should have a “sun set clause” after 3 to five years in case it does not fulfill the economic or public health objectives.

Should GDP be linked to the health of our population? Because the root cause of diseases like diabetes, obesity, etc. lies in other sectors like trade, economic growth and globalization and is no longer just a technical issue of public health. Solutions have to found politically.

Government should consider setting up a group of independent experts of integrity without any aid from industry for guiding the action to reduce dietary intake of sugar. With a serious epidemic of non -communicable diseases burden on its head India cannot afford to take wrong decisions when it comes to raising investment in food sector. Governments’ power to sign the investment agreements must go hand in hand with the use of domestic autonomy to regulate such industry.

Expectations are high from the new government, as people have become more aware. If the government goes for FDI that generates jobs, the challenge for the legal luminaries in the Government would be to make an accurate assessment about the impact beyond jobs.

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