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SPC Ardmona's bailout is crucial given China's food safety record
by Christopher G. Baker
Sydney, Australia (TCM) Feb 18, 2014


In 2008, Chinese baby formula and milk products were tainted with melamine, killing six babies and hospitalising many more. Image courtesy EPA/Wu Hong.

SPC Ardmona's $22 million lifeline from the Victorian government seems to have saved Australia's largest food packaging company. Yet the firm's recent tribulations are a reminder of why I regularly choose to buy products at the supermarket that are more expensive than the alternative.

One reason is that Australian food standards are generally world-class when it comes to the amount of contamination allowed from metals such as lead and cadmium. Although it is not always possible to police this perfectly, these standards allow a high degree of confidence that Australian food is free from contamination.

Contamination issues
The story is different elsewhere. In China, for example, the past decade has seen a host of food-contamination issues. Besides the notorious melamine baby formula scandal, there were also rice products with toxic levels of cadmium, and vegetables tainted with other industrial heavy metals such as lead, chromium, zinc and nickel.

In March last year, up to 16,000 diseased pig carcasses were found rotting in Shanghai's Huangpu River, after a crackdown on black-market sales of substandard meat prompted the animals' owners to dump them.

There have also been fears over soy sauce made using human hair, and slaughtered sheep injected with filthy pondwater to boost the weight of the meat.

Rapid growth, but at what cost?
Last year, my colleagues and I released a report on the state of food security in Asia. It highlighted serious environmental issues related to China's food supply, stemming in part from the chronic pollution of China's water and farmland.

Among other things, it showed that China's rampant economic growth has come at a severe cost to its environment, effectively turning its rivers and lakes into industrial dumping grounds. As a result, 90% of groundwater in China is polluted, 65% severely so, with contaminants such as pesticides, fertilisers, and petrochemicals.

According to China's Vice-Minister for Land and Resources, 3.3 million hectares of agricultural land are moderately or severely polluted, an area roughly the size of The Netherlands. This results in the contamination with heavy metals of 12 million tonnes of grain per year; an amount greater than the entire cereal production of Japan.

Along China's vast coastline, 68,000 square kilometres of coastal waters are now classified as severely polluted. Figures from China's National Marine Environmental Monitoring Centre show that in 2012, some 17 million tonnes of pollutants flowed through 72 of China's rivers, including 93,000 tonnes of oil and a staggering 46,000 tonnes of heavy metals such as lead and cadmium.

The deadly combination of food, water and air pollution in China has led to a dramatic increase in the number of "cancer villages", where high rates of cancer have risen in line with water and soil contamination.

Poor track record
This is not to say that all Chinese canned food is necessarily contaminated. Nor does it suggest that it is only China facing these issues. India, Bangladesh and Vietnam, to name a few, are also facing serious challenges to clean up pollution and contamination.

But for importers of Chinese food, China's track record on food safety, and its systemic problem with severe and chronic pollution, should raise serious concerns.

Several reports have shown how deadly chemicals have infiltrated the Chinese food system, such as through the use of waste water to irrigate crops, and the presence of pesticides in market food. A 2012 review of the extent of lead contamination in China concluded that "the problem of lead pollution in China is a global problem".

Of greatest concern to Australian consumers of canned fruit should be a recent study in Zhejiang province, showing that oranges, grapes, pears and plums were contaminated with levels of chromium, copper, cadmium, mercury and lead well in excess of Chinese safety standards. It is worth noting that Chinese safety standards allow twice the level of lead permitted in Australian fruit.

Although a recent article in The Conversation suggested that the label of "cheap, dumped and frequently contaminated" attached to Chinese food is a shortsighted view, I would argue exactly the opposite.

China is attempting to make changes to the amount of pollution in its food chain, and clean up its environment. Yet the reality is that as the pressure for food and water continues to ramp up, food contamination is also likely to increase.

China's environmental problems border on insurmountable, and when combined with systemic corruption in environmental monitoring and the greater profits to be gained from industrial output over agriculture, it makes for a bleak long-term outlook.

What does this mean for Australia?
China is already Australia's largest supplier of prepared fruit. According to data from the UN Food and Agriculture Organisation, Australia imported just 3,000 tonnes of packaged Chinese fruit in 2001, rising to 27,000 tonnes a decade later. As a comparison, statistics prepared for the Australian Productivity Commission show that SPC Ardmona sold just over 36,000 tonnes of packaged fruit in 2012.

Australia's last fresh fruit cannery is safe for now. But its demise would have caused a shortfall in packaged fruit that would need to be sourced from overseas. Given that China is Australia and the world's largest supplier of prepared fruit, it's likely that much of the shortfall would be sourced from China.

The challenges facing SPC Ardmona highlight the risks confronting both Australian food producers and consumers. The steady increase in cheap food imports means that Australian producers of food face an increasingly uneven playing field: one in which it is harder every day to stay profitable.

For Australian consumers, the increase of food imports from countries facing severe contamination issues - such as China - creates a difficult choice between the superior and more expensive Australian product and the often much cheaper import. Unfortunately, there are far too many consumers who are unaware of the potentially serious risks to their health of buying the import.

In denying federal assistance to SPC Ardmona, Prime Minister Tony Abbott has said he wants to signal the end of the corporate "free ride". But he should bear in mind that the consequences of leaving Australian food manufacturing by the roadside are far greater than any short-term economic agenda.

Christopher G. Baker is a Research Analyst, Centre for International Security Studies at University of Sydney

Source: The Conversation

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