Food safety: Challenges in dairy industry

Recent study shows only 64 per cent of the recommended measures are adopted by milk producers in Nepal despite the government putting in place the ‘code of practices for dairy industry’ way back in 2002

Food safety is, inevitably, a vital component of food security. However, the compliance with food safety measures (FSM) along the value chain remains elusive in most of the developing countries. The emergence of new modern market chains and increasing integration with the global economy has been putting pressure on governments for better compliance with FSM along the food value chain. Governments in these countries are now seriously looking for ways and means to improve the status of food safety.

The status of compliance with FSM in South Asia in general is not satisfactory, and particularly in Nepal it is precarious— and even worse. Nepal often has to incur heavy losses when consignments for exports are rejected due to lack of compliance with FSM.

Efforts taken by the governments in the past have been largely inadequate. The government’s control and command approach to ensure food safety has not worked satisfactorily due to lack of physical, human and institutional capital for monitoring the compliance with FSM across the entire value chain.

Globally, the “demand-pull systems” have worked well in improving the quality and food safety attributes of the product. Nepal too needs to shift from “supply-side food safety” approach to “demand-pull systems”.

To understand the status of adoption of FSM and its implications, the International Food Policy Research Institute (IFPRI) undertook a comprehensive study on compliance with FSM in Nepal’s milk production. We chose milk, for it is one of the most important food items--for rich and the poor; young (most importantly children) and the old.

It is also found to be highly sensitive and carries vector of all possible microbes and extraneous particles in it. We focussed our attention at farm level, as better compliance at production level goes a long way to minimise the chances of contamination at successive levels. Issues like animal welfare, prevalence of drug residues and antibiotics resistance can be effectively addressed at the farm level.

We investigated the status, estimated the cost, identified the drivers and assessed the impact of compliance with FSM in milk production. Data were collected from geographically and institutionally diverse regions. Our results show that the status of farm level compliance is not very encouraging. On an average, only 64 per cent of the recommended measures are adopted by the dairy farmers, though the government released the “code of practices for dairy industry” way back in 2002. The intensity of adoption of FSM exhibits significant variations. The dominance of informal channels in Nepal’s milk market further complicates the compliance, and consumers, processors and cooperatives often complain about unhygienic milk production at the farm level.

In comparison to the international standards, Nepal’s mean total bacterial count (TBC) was found to be nine times higher on farm and 104 times higher in plant.

It seems farmers are not very enthusiastic about fully complying with FSM since it involves incremental costs and the markets in Nepal often do not reward for food safety.

On an average, a dairy farmer in Nepal has to incur an additional expenditure of Rs 2 per litre of milk production. The moot question is whether the consumers are willing to compensate the producers for enhanced cost of food safety? Several studies across the world show that consumers are willing to pay a premium for safer food products.

Several policy actions are recommended based on comprehensive empirical analysis undertaken by IFPRI. Massive awareness needs to be created among the producers. Farmers should be sensitised to discard milk from seriously diseased and infected animals, or even from animals receiving medication.

Periodic monitoring and inspection is critical to ensure adherence to “dairy code practices”. The access to information and frequency of inspection for conformity with safety and quality standards are playing critical role in enhancing the compliance with FSM in Nepal.

Farms having information about FSM have shown an 11 per cent higher adoption. Similarly, the farms which have been inspected for conformity with safety and quality standards have increased their adoption of FSM also by 11 per cent.

These findings suggest strengthening of extension delivery and monitoring mechanisms in the country. The government should invest adequately to build physical, institutional and human infrastructure in order to put up a robust system to ensure compliance with FSM along the food value chain.

Further, the integration with formal channels enhances the adoption of FSM by 8 per cent. We need to promote and expand the inclusive formal milk markets to ensure better compliance with FSM.

Finally, a pricing strategy based on the quality of milk production should be vigorously pursued to incentivise the farmers for higher adoption of FSM.

The government should develop and prioritise short-, medium- and long-term action plans for improving compliance with food safety measures to access the global markets and reaping the benefits of expanding trade opportunities in agro-products.

Kumar is research fellow, International Food Policy Research Institute