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Green or Blue Genes?

Who knew that a mere vegetable – the humble purple, shiny brinjal, eggplant, aubergine – could create such an uproar?

And why retailers and consumer product companies should be concerned about genetically modified (GM) crops is a complicated story with multiple twists and turns across political, economic, social, scientific and philosophical landscapes.

At their basic level, brinjals have so far been possibly equally hated and loved for their flavour and texture across the world. But their newest avatar – Bt Brinjal – is now being viewed on the one hand as an evil alien transplant that will kill everything good and natural, and the first step of capitalist monopolies to dominate food crops in a large and growing market, while on the other hand it is seen as a saviour of the embattled farmer, an eco-friendly alternative to pesticides and a well-thought out scientific solution to agricultural productivity.
 
Though it might appear that genetically modification is a 20th century invention, the fact is that such food is not new. Since the time we began farming some 10,000 years ago, we have been carrying out genetic screening and selection, and modifying to create plants and animals that suit our purposes. All farmed products are a product of artificial rather than pure natural selection, as humans have pure-bred and cross-bred strains of crops that are seen as more beneficial in terms of nutrition, hardiness and ease of cultivation.

However, there are some important differences between earlier efforts and now, which underlie the recent loud and violent debate. Let me outline the concerns as seen from the anti-GM side of the table.

  • Firstly, time.

Previous genetic selections and modifications happened not just over generations of plants, but generations of human beings. By default, this allowed time to try and test different variants and arrive at varieties that met multiple criteria – profitable cultivation, nutrition, taste, durability and safety. There are concerns that not enough is known about the eventual impact of the new GM crops on human and environmental health, and the speed of adoption frightens people. (In 1948 a Swiss chemist was awarded the Nobel Prize for his work on DDT’s effectiveness as a pesticide, just a few short decades before it was banned from widespread agricultural use for – among other things – apparently causing cancer, and being acutely toxic to organisms other than the pests at which it was targeted.)

  • Secondly, variety as an insurance.

In the past, if some variety was wiped out due to climatic variation or pests, it was very likely that alternative varieties were close at hand to substitute it. (Estimates about the number of brinjal varieties in India alone vary widely, from 2,000 to over 3,500 though most of them are not actively cultivated in any significant number.) On the other hand the agricultural information and supply chain today is far more integrated, allowing a previously unknown speed and completeness of adoption of new technology and inputs, frequently at the cost of traditional knowledge. Extinction of natural species is not just due to hunting or disasters, whether man-made or natural. If a new engineered variety is profitable in the foreseeable future, farmers would very likely replace other varieties without examining the long-term impact. (This is true also of other inputs, like overuse of heavily promoted synthetic fertilisers or pesticides.)

  • Third, the methods of genetic engineering itself.

Previous ‘engineering’ was restricted to pollination, grafting and selection, whereas now we are attempting to manipulate individual genes or sets of genes, and transplanting genes across species (from a bacterium in the case of Bt). This approach is similar to how we look at most things, today – individually, separate from or devoid of the natural context, ignoring any interaction with other elements (other genes, in the case of genetically modified crops). While in some cases there may be no significant impact on the outcome, our knowledge of genetics is far from complete and holistic to be able to confidently make the statement about no long-term harm.

  • Finally, the politics of economics.

All agriculture in the last 10,000 years was based on the assumption that future generations of the crop could be raised from seed saved from previous generations. Current genetically modified varieties, on the other hand, are seen as corporate intellectual property created with huge investments, where the return of investment is sought from fresh seed being sold by the company to the farmer for each planting. This is one of the most violently opposed aspects of GM crops, not just in developing economies like India but in developed economies such as the US as well.

I believe I’ve listed the major concerns of the anti-GM side of the debate above, with the rider that not everyone on the anti-GM side shares all the concerns equally.

Unfortunately, the debate is neither simple nor clear as emotions and stakes run high on both sides of the debate.

Pro-GM groups and individuals express the view that their opponents are stuck in the past and are standing the way of progress that is urgently needed to solve immediate human problems.

For one, proponents of genetic modification will point out that the humongous increase in human population needs new strains of crops that can grow more with fewer inputs in terms of water, fertilisers and pesticides. Without such crops, we run the risk of widespread food and water shortages around the world. ‘Green’ concerns may also be quoted in favour of GM crops. The argument is that using genetically modified crops would actually do less damage to the environment than conventional crops, for instance by needing lower doses of pesticide, or producing more crop from smaller patches of land.

Another concern quoted by the pro-GM group is that publicly funded organisations do not have the skills, the scale or the funding to undertake massive and rapid research for the breakthrough agricultural solutions needed in the short term, and that fundamental research needs to be carried out by commercial for-profit organisations. Obviously, as an outcome of that, the profit from the intellectual property needs to be protected such that it can provide adequate returns over a period of time.

For now, most governments (including in India) are playing it safe by maintaining the current status, and disallowing the introduction of GM crops, although there are opposing viewpoints even within each government.

As consumers, also, we could take the view, as many consumers are taking, that what exists (or what existed many years ago) is the best and safest option, since it is the most proven. We could give more muscle to producers and sellers of natural, organically grown varieties, by choosing to buy only such merchandise and rejecting GM foods completely.

I wish it was that simple.

I wish we could say that everything artificial is harmful and everything natural is beneficial. I wish we could blithely accepts labels such as ‘Franken-foods’ for genetically modified crops, treating them as a monster creation.

I wish we could say that one side or the other is adopting more robust scientific methods so that we can take clear and well-informed decisions.

As consumers, unfortunately for us, the truth is not so clear. There are pros and cons on both sides, which will get quoted in and out of context, to support different arguments, for and against genetic modifications.

More importantly, both for consumers and the industry, what is not clear is how complete separation of GM and non-GM products can be maintained. Once GM foods enter the supply chain, it is likely that they will mix with non-GM produce, whether at the farm, in storage or in processing. The current compliance standards in the global food sector offer no confidence that the non-GM and GM supply chains can be sealed off from each other and monitored separately, such that retailers and consumers can make their choice with complete confidence that they are buying what it says on the label.

In this case, more time, and a more robust and holistic investigation may be the only solution. The Environment Minister has asked us to ‘watch this space’.

Now what we end up with in terms of individual, social and economic health will depend on what kind of effort and intent goes into that space. Industry, consumers, scientists, farmers, and governments, all have a role to play in shaping that intent. We all choose whether we want the green organic genes – or the other kind, be they blue genes, purple or yellow.

Spinach withers in economic slowdown

Sapna Agarwal

MINT, Mumbai, February 18, 2010

Grocery supermarket chain Spinach appears to be caught up in a slide that has seen a number of Indian retailers, particularly from low-margin food and grocery industry, down shutters in the wake of the economic slowdown.

Empty shelves and aisles greet you at the chain’s flagship store in Mumbai’s Bandra Kurla Complex. Its branch in Juhu, known for its prime location and suburban Mumbai clientele, presents a similarly dismal picture.

Fresh stock hasn’t arrived for past three months at any of the Spinach stores, owned by Wadhawan Food Retail Pvt. Ltd, a Wadhawan Group company. “We don’t have any official communication on when the fresh stocks will come,” said Ganesh Thyagarajan, a manager at the Juhu store.

Outlets in Versova and Kalyan have already downed shutters. Another employee said on condition of anonymity that the firm was thinking of closing down more branches in coming weeks.

A spokesman for Wadhawan Food said, “The company is in the process of cost-cutting and consolidation, and looking at store-level profitability across the chain, which could entail some store closures.”

Wadhawan Food runs food and grocery supermarket stores under the brand names of Spinach in western and eastern India, Sabka Bazaar in the north and Smart Retail in the south. Mumbai also has stores under the brand Maratha Cooperative. The group has close to 180 supermarkets under various formats and has closed nearly 50 stores across the formats in the past year, according to people close to the company.

Mint reported on 6 September that Sabka Bazaar outlets had stopped receiving supplies. They are yet to resume.

Wadhawan Group is not the only one to have taken a hit. Over the past year, the sector has seen 1,600 supermarket of Subhiksha Trading Services Ltd down shutters nationwide after defaulting on loans, vendor payments and staff salaries.

Vishal Retail Ltd, with 170 outlets countrywide, is seeking to reschedule debt of around Rs730 crore. The correction, which started last year with retailers such as Aditya Birla Retail Ltd, which has food and grocery stores under the brand name More, RPG Group’s Spencers, Reliance Retail Ltd, Future Group’s Big Bazaar and Food Bazaar, is still claiming new victims.

The Wadhawan Group has businesses spread across real estate, retail, food and beverage, education, financial services and hospitality sectors.

“Following collapse of Lehman Brothers and the ensuing liquidity squeeze, the group has prioritized its funds for investments in core?businesses and retail lacked the investments,” said Narayanan Ramaswamy, executive director, retail advisory service, KPMG Advisory Services Pvt. Ltd.

Industry watchers agreed organized food and grocery retail was yet to find its feet in India.

“Other retail formats saw one store closing for every 20 that have opened. In food and grocery retail, the number of closures versus the opening of new outlets is higher,” said Anuj Puri, chairman and country head of property advisory Jones Lang LaSalle Meghraj.

Devangshu Dutta, chief executive of consultancy Third Eyesight, said retailers were still finding out the right size, positioning, demand and supply equation for stores.

“There is no stigma attached to store closures,” Dutta said. “If a location is unprofitable, companies take a call on rationalization and profitability, and decide on store locations.”

But Ramesh Viswanathan, executive director, CavinKare Group, put the onus on retailers and said they needed to grow out of the “neighbourhood store” mindset. “The principal challenge for modern retailers is to innovate to drive footfall and increase consumption,” he said.

Pack it yourself – refill when you buy

According to The Daily Telegraph, Asda has devised a system for customers to “buy fabric conditioner from a vending machine which pumps the liquid from a large vat in the stockroom directly into a pouch”. The project aims to cut packaging costs and help reduce prices for consumers. The scheme is partially funded by the UK government’s anti-landfill agency Wrap.

A lot of debate was generated on retailwire.com (“Do it yourself all over again”). A number of people who were underwhelmed by the whole concept and questioned the value, including labelling the initiative “anecdotal” and “one-off” with “limited appeal”.

I feel somewhat differently. A journey of a thousand miles begins with a step. A plastic-free landscape begins with a refill. I understand the cynicism expressed, but don’t want to give in to it.

Yes, changing habits is difficult. But, hard as it is to believe, there was a time when families didn’t have kilos of daily garbage. Consumer goods companies, retailers, marketers changed that. And they achieved the change through sustained and dedicated effort over a several decades, until waste became the “cheapest” and easiest choice.

I think it’s time to reverse the thrust on that flywheel.

(Click here to read the Telegraph article.)

Another luxury partnership from abroad goes kaput

Raghavendra Kamath
Business Standard, Mumbai, February 12, 2010

Aigner, the German luxury brand, and Genesis Luxury, the up-market retailing arm of Genesis Colors, have ended their tie-up in the country, as their plans did not go as expected, said a person close to the development.

Genesis and Aigner had agreed in 2007 to import and distribute merchandise. The partnership ended last month. Genesis Luxury, which ran the Aigner stores in Mumbai and Delhi (three in all), has shut these, through mutual agreement.

Aigner, part of Etienne Aigner AG, hadn’t tied up with any other company, sources said. The company did not respond to emails from Business Standard.

When asked, Sanjay Kapoor, managing director, Genesis Luxury, said: “Yes, we have ended the marketing tie-up with Aigner in India, after successfully running the brand for three years.”

Kapoor denied any difference of opinion between the partners. “In fact, we have had a very cordial relationship with the brand. It is a pure business-related decision. And, we will be looking at bringing in other newer brands to India in the next few months,” he said.

Aigner entered India in 2004 on a tie-up with Sports Station India Pvt Ltd (SSIPL) and set up the first store in Delhi. SSIPL had plans to open three more stores in the country, but the partnership didn’t continue beyond 2007. Aigner then signed the deal with Genesis.

Aigner is not the only luxury brand in recent times to end its relationship with an Indian company. The Murjani Group, promoted by Vijay Murjani, parted ways with luxury brands such as Gucci, Bottega Veneta and Jimmy Choo as part of its plans to shift its focus to premium retailing from luxury retailing. Bottega Veneta and Jimmy Choo are now with Genesis.

In fact, half-a-dozen international brands have pulled out of their partnerships or from India in recent memory. Raymond, the apparel maker and retailer, ended its partnership with Italy’s GAS. Kishore Biyani’s Future Group ended a tie-up with Italian brands Replay and Etam.

Britain’s Marks and Spencer ended its franchisee agreement with NRI businessman V P Sharma’s Planet Retail and tied up with Mukesh Ambani’s Reliance Retail, as it could not expand the way it wanted.

"Typically, break-ups happen when there is any shortfall in the performance expected from both sides. From the international brand side, either enough sales were not happening or Indian firms found returns on investment too low,” says Devangshu Dutta, chief executive of Third Eyesight, a management consultancy.

However, Genesis has planned to open more stores under its luxury portfolio, including those of Jimmy Choo, Bottega Veneta and Just Cavali — in all, 10 to 12 stores each for these international luxury brands over the next three to five years. Also, 100 Tie Rack Landon stores and 50 Satya Paul accessory stores will be opened over the same period, to achieve a target of becoming a Rs 1,000-crore company in five years.

Recently, Genesis signed a joint venture with Burberry, the British luxury goods retailer, where it took a 49 per cent stake. The company plans to open stores in metropolitan cities.

Textile makers seek more funds for technology in Budget

Reporting by Aniruddha Basu; Editing by Ramya Venugopal

Reuters, Thu Feb 11, 2010

Utilisation levels are high and given the growth in domestic consumption it would be very encouraging if the allocation under TUFS is increased as textile makers are investing more," said Sunil Khandelwal, Chief Financial Officer at Alok Industries Ltd.

The textile industry had been battered by the economic slowdown for much of 2008/09 but has begun to recover in the past 2-3 quarters with major textile firms such as Alok Industries, Raymond and Century Textiles & Industries Ltd reporting higher sales and profits in Oct-Dec.

But analysts said that the government needs to quicken disbursement of funds as there was no clarity on how soon a unit can receive the funds under TUFS, which is essentially a low interest-rate loan.

"TUFS is not a grant, the interest waiver is what you are getting. A fundamental issue is to see how the funding is disbursed and how long it takes for the units to get the waiver," said Devangshu Dutta, chief executive, Third Eyesight, a textile consultancy.

The industry has also asked for removal of duties on man made fibres to increase utilisation in the country, CITI said in a statement.

Currently there is a ratio of 62:38 in the utilization of cotton and man-made fibres in the country, as against the global ratio of 40:60, it said.

VALUE ADDITION

Excise duty on man-made fibres had been increased from 4 percent to 8 percent in the last annual budget.

The industry has also asked that liquid fuels used by textile and clothing units for captive power generation be exempted from duties to encourage them to cut energy costs, said D.K. Nair, secretary general of CITI.

"The thought process needs to be on value addition rather than capturing percentages of low value items," Third Eyesight’s Dutta said.

Industry participants are also asking that export credit for textile and clothing units be provided at a uniform rate of 5 percent interest. Export credit is currently provided at about 8 percent interest.

"They may get more export benefits, but I don’t expect any major stimulus to be given this time. Overall the budget would be slightly conservative or negative," said an analyst from a Mumbai brokerage who declined to be named.

The budget will be presented on Feb 26.