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Ridding food safety road of rats
By Fernando Bensuaski |
August 30, 2011, Tuesday
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IT was Franz Kafka who wrote, "So long as you have food in your mouth, you have solved all questions for the time being."
The Chinese government understands this concept and has done an extraordinary job of "putting food in people's mouths." However, the questions of safety and quality are hanging in people's minds.
Among the sectors of the Chinese economy calling the loudest for strong reforms are the health and food sectors.
The food sector is of greater importance to most of us because we don't get sick often but we eat two or more times a day.
I find it bizarre to walk into a hospital and see a room with 120-plus chairs fully occupied by people with intravenous bottles attached to their arms.
I also find it alarming that antibiotics represent 81 percent of all Chinese prescriptions, but only 31 percent of prescriptions in Western countries.
However, that is nothing compared to walking into a food processing plant in Shanghai and another near Suzhou, Jiangsu Province, and then another in Zhengzhou, Henan Province, and discovering that cleanliness is not a priority to anyone.
Let's not confuse "safety" with "quality." Safety is an absolute. Quality is relative to the expectation of the recipient. Only the insane will expect a McDonalds' hamburger to be of the same quality as that of Red Robin, at four times the price.
The food sector has two problems: supply and safety, with supply being of higher concern for policy makers, but safety being of growing importance to the public at large as the middle class grows.
The primary function of a government is to protect its people. This obligation extends not only to defense against enemies from without, but also enemies from within: from terrorists to those who endanger our highways and our food supply.
With the exception of soybeans, of which China imports 50 million tons and produces domestically only 15 million tons annually, China produces enough of the basic grains (wheat, corn, rice, etc) to feed the nation. Thus, it is winning the supply war, even though China does not have sufficient arable land: 108.6 million hectares (or 0.08 hectares per person), while the US has 0.57 hectares and Brazil has 0.31 hectares per capita, according to 2008 data from the World Bank.
Chinese leaders claim 119.9 million hectares in arable land, which is near the "red line" created as the minimum necessary for agricultural self-sufficiency.
Additionally, whatever arable land China has is divided into small farms, with an average of 0.13 hectares per farm (compared with 170 hectares in the US and 246 hectares in Brazil). While this enhances the sense of entrepreneurship for which the Chinese are famous, it destroys productivity, especially of products that require use of large equipment for enhanced production.
And finally, Chinese farms' production per hectare is much lower than its peers, in part due to the lack of irrigation and the lack of appropriate fertilizer and pesticide usage. The last item leads to the issue of safety: domestic products, particularly fruits and vegetables, are subject to inappropriate use of pesticides, which are used to enhance color or other chemicals used to increase fruit size, in addition to the contamination of the water table by unsupervised industrial facilities.
Corporate honesty
And finally, there is the question of misleading and criminal corporate practices. In reality, corporate inclination to deceive the public is global - not uncommon elsewhere, including the US. Very rarely is there a company, like ice cream maker Ben & Jerry, with a history of honest marketing.
The US has achieved a relatively high level of corporate honesty within the food processing sector as a result of three forces: strong legislation that started with the Pure Food and Drug Act of 1906, court-supported strong enforcing arms of both the Food and Drug Administration and the US Department of Agriculture, and a tort-driven legal systems that forced the insurance companies to become part of the law-enforcement side of the business.
Fines that are smaller than the company's executives spend per night in a nightclub are meaningless. Even the US FDA and USDA fines of as high as US$4 million are small compared to the tens and hundreds of millions that the injured parties can extract from companies providing insurance coverage to food producers.
Running rats
Despite this relatively high level of food safety in the US, a Golin/Harris Trust Survey in 2002 found that 70 percent of the US respondents had doubts about the safety of prepared foods. The fear rises and falls with the news about one or another food-related scare: from e-coli infected hamburgers to news of a rat running across the restaurant's floor.
At the end, in a free market, it is not possible for a mistrusted brand to survive and prosper. Year after year, global surveys of the most valuable brands list McDonalds, Coca-Cola, Heinz, Nestle, Pepsi, and Campbell's within the top 100, with McDonalds and Coca-Cola solidly entrenched in the top 10.
China is making progress in assuring food safety; but it has a long way to go.
Even in the US ,which has been traveling this road a lot longer, the US Secretary of Agriculture said in a late 2009 radio interview, "I can assure you that we are doing everything we possibly can to make sure that that product is safe through our testing, through our inspectors ... I will say also that there is still work to be done to continue to improve what we do and until we get the number of food-borne illnesses down to zero and the number of hospitalizations down to zero and the number of death down to zero, we'll still have work to do."
Fernando Bensuaski is managing director of Goshawk Trading Strategies Ltd, Shanghai.
The Chinese government understands this concept and has done an extraordinary job of "putting food in people's mouths." However, the questions of safety and quality are hanging in people's minds.
Among the sectors of the Chinese economy calling the loudest for strong reforms are the health and food sectors.
The food sector is of greater importance to most of us because we don't get sick often but we eat two or more times a day.
I find it bizarre to walk into a hospital and see a room with 120-plus chairs fully occupied by people with intravenous bottles attached to their arms.
I also find it alarming that antibiotics represent 81 percent of all Chinese prescriptions, but only 31 percent of prescriptions in Western countries.
However, that is nothing compared to walking into a food processing plant in Shanghai and another near Suzhou, Jiangsu Province, and then another in Zhengzhou, Henan Province, and discovering that cleanliness is not a priority to anyone.
Let's not confuse "safety" with "quality." Safety is an absolute. Quality is relative to the expectation of the recipient. Only the insane will expect a McDonalds' hamburger to be of the same quality as that of Red Robin, at four times the price.
The food sector has two problems: supply and safety, with supply being of higher concern for policy makers, but safety being of growing importance to the public at large as the middle class grows.
The primary function of a government is to protect its people. This obligation extends not only to defense against enemies from without, but also enemies from within: from terrorists to those who endanger our highways and our food supply.
With the exception of soybeans, of which China imports 50 million tons and produces domestically only 15 million tons annually, China produces enough of the basic grains (wheat, corn, rice, etc) to feed the nation. Thus, it is winning the supply war, even though China does not have sufficient arable land: 108.6 million hectares (or 0.08 hectares per person), while the US has 0.57 hectares and Brazil has 0.31 hectares per capita, according to 2008 data from the World Bank.
Chinese leaders claim 119.9 million hectares in arable land, which is near the "red line" created as the minimum necessary for agricultural self-sufficiency.
Additionally, whatever arable land China has is divided into small farms, with an average of 0.13 hectares per farm (compared with 170 hectares in the US and 246 hectares in Brazil). While this enhances the sense of entrepreneurship for which the Chinese are famous, it destroys productivity, especially of products that require use of large equipment for enhanced production.
And finally, Chinese farms' production per hectare is much lower than its peers, in part due to the lack of irrigation and the lack of appropriate fertilizer and pesticide usage. The last item leads to the issue of safety: domestic products, particularly fruits and vegetables, are subject to inappropriate use of pesticides, which are used to enhance color or other chemicals used to increase fruit size, in addition to the contamination of the water table by unsupervised industrial facilities.
Corporate honesty
And finally, there is the question of misleading and criminal corporate practices. In reality, corporate inclination to deceive the public is global - not uncommon elsewhere, including the US. Very rarely is there a company, like ice cream maker Ben & Jerry, with a history of honest marketing.
The US has achieved a relatively high level of corporate honesty within the food processing sector as a result of three forces: strong legislation that started with the Pure Food and Drug Act of 1906, court-supported strong enforcing arms of both the Food and Drug Administration and the US Department of Agriculture, and a tort-driven legal systems that forced the insurance companies to become part of the law-enforcement side of the business.
Fines that are smaller than the company's executives spend per night in a nightclub are meaningless. Even the US FDA and USDA fines of as high as US$4 million are small compared to the tens and hundreds of millions that the injured parties can extract from companies providing insurance coverage to food producers.
Running rats
Despite this relatively high level of food safety in the US, a Golin/Harris Trust Survey in 2002 found that 70 percent of the US respondents had doubts about the safety of prepared foods. The fear rises and falls with the news about one or another food-related scare: from e-coli infected hamburgers to news of a rat running across the restaurant's floor.
At the end, in a free market, it is not possible for a mistrusted brand to survive and prosper. Year after year, global surveys of the most valuable brands list McDonalds, Coca-Cola, Heinz, Nestle, Pepsi, and Campbell's within the top 100, with McDonalds and Coca-Cola solidly entrenched in the top 10.
China is making progress in assuring food safety; but it has a long way to go.
Even in the US ,which has been traveling this road a lot longer, the US Secretary of Agriculture said in a late 2009 radio interview, "I can assure you that we are doing everything we possibly can to make sure that that product is safe through our testing, through our inspectors ... I will say also that there is still work to be done to continue to improve what we do and until we get the number of food-borne illnesses down to zero and the number of hospitalizations down to zero and the number of death down to zero, we'll still have work to do."
Fernando Bensuaski is managing director of Goshawk Trading Strategies Ltd, Shanghai.
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