Modi’s choice to feed half of India fortified 'rice' is bonanza for Dutch firm

On Independence Day, 15 August 2021, when Prime Minister Modi announced that over 80 crore people will be fed rice fortified with iron and vitamins to combat rising cases of anaemia and other micronutrient deficiency diseases, it was touted as a major health policy initiative. 

Part one and two of an investigation by The Reporters’ Collective showed the Modi government rushed on with its plan to supply fortified rice despite internal and external experts' warning it on the adverse effects of feeding people, particularly children, fortified rice. 

In this final part of the series, The Collective reveals how at least six international organisations found their way into an Indian government agency to influence decisions and open the Indian market to global suppliers and manufacturers of premixes that are used to produce the artificial fortified rice kernel, an annual business opportunity of Rs1,800 crore created solely by the Union government’s mandate.

The Collective’s investigation found all the six organisations are linked to one company based in The Netherlands. Royal DSM NV, one of the world's most prominent producers of fortified rice premix. DSM claims to be a health and nutrition company. It produces the powder used in fortification. The firm, The Collective found, funds one of the six organisations, collaborates with another, sits on the advisory board of a third and partners with the rest. 

These six organisations influenced government policy on supplying rice and other food items fortified with micronutrients across the country, collected evidence to buttress the case for fortification, ran pilot projects with state governments, worked to set standards and charted countrywide rollout. The Central government used ‘science’ generated by these organisations to justify the mandatory supply of fortified rice in India. The government guidelines on fortification were developed by plagiarising (in parts, verbatim) from toolkits developed by some of these organisations.

In return, Modi’s announcement handed Royal DSM a bonanza. 

The company did not hide its gratitude. “We are very thankful that Prime Minister Modi’s government has mandated the fortification of rice, at least in the social safety nets part of the rice pipeline in India,” François Scheffler, regional vice-president, human nutrition and care, Asia Pacific, and president, DSM Asia Pacific, told the Indian media.

The Collective’s gathered evidence includes internal government records as well as public documents.

Within 18 months of Modi’s announcement, Royal DSM set up a 3,600-tonne capacity fortified rice kernel plant in Hyderabad. Scheffler told The Print that Royal DSM is working with the government, NGOs and rice millers in India to expand its production.

DSM is estimated to have already cornered 17 per cent of the Indian micronutrient premix market, says market research agency Giract. The domestic market was estimated to be worth over Rs660 crore in 2021, and soon it will be worth Rs1,800 crore a year, thanks to the Union government's mandate.

While DSM is open about its business strategy involving non-profits and engagement with governments, it's not the only corporate that would stand to gain significantly from the government's decision. Neither is their modus operandi unique. Many global companies in the business of food and nutrition products lobby through non-profits and directly to create markets in the developing world.

A Meeting in Mexico

The idea to rapidly “rally” non-profits and corporates to push rice fortification in developing countries was crystallised way back in 2016, in Cancun, Mexico. International non-profits congregated to attend a symposium on rice fortification organised by DSM and some global NGOs. The agenda on the table was a grand one: “Create a movement that will deliver a global roadmap for scaling up rice fortification.” 

One of the speakers, the current president of non-profit group Nutrition International, Joel Spicer said at the symposium, “The policy advocacy piece is missing from the rice fortification agenda. We need to communicate with the governments’ policy makers — and establish how much the scale-up of rice fortification will cost, what they will get from it and who’s going to pay for it.”

A month after the conference, the food safety regulator of India, the Food Safety and Standards Authority of India (FSSAI), set up a ‘resource hub’ geared specifically to fortification. One can only guess if it was a mere coincidence or not. The Food Fortification Resource Centre, as it came to be called, planned ‘alignment and advocacy’ and worked towards ‘creating demand’ for fortification.

These are business terms to describe the act of convincing governments to make it a must for people to consume such food products. Indian and international food product companies have always eyed the Union government’s vast food security schemes serving more than 80 crore people in India. In 2016, the fortified food producers set their sights on this Indian market.   

A bevy of international non-profits, including Nutrition International and one previously owned and still funded by DSM, became partners in the resource centre, which works as the government’s nodal arm for fortification and is dependent on non-profits for every aspect of its functioning. They attended meetings on fortification and were invited to major government policy meetings, thus playing a major role in lobbying for food fortification with lawmakers in India.

When the resource centre released the primary document that sketched out the plan for fortification in 2017, it listed nutrition non-profit Sight and Life as one of the government’s partners in scaling up fortification across the country. Sight and Life previously operated ‘under the umbrella’ of DSM and continues to be funded ‘generously’ by the firm. While the non-profit claims it is an ‘independent foundation’, half its board members— including the chair of the board of trustees—are DSM personnel. As a partner, the non-profit would be involved in setting policies and even have a say in notifying the food regulator's standards for fortifying rice. 

The 2017 document calls for a joint advocacy campaign led by the FSSAI — “bringing the credibility, authenticity and trust of the government” — but adds that this would be done “with financial contributions from the industry and premix suppliers”.

While the government was still chalking out plans to scale up the fortification programme, the food regulator held a meeting with the premix industry in March 2017. The minutes of the meeting recognise DSM as the only premix supplier for rice fortification. In the meeting, the firms decided on a price range for both premix manufacturing and fortified rice kernels. “FSSAI does not fix any market price of any food commodity,” said the government’s food regulator over mail. However, the minutes of the meeting clearly show each premix supplier enumerating the price range of the premix they offer. 

Experts say the fact that the resource centre is intertwined with non-profits funded by firms with commercial interests in the fortification policy raises ethical questions about its functioning.

“Having the Food Fortification Resource Centre in FSSAI requires investigation about its role,” Dr Arun Gupta, a paediatrician and convenor of the Alliance Against Conflict of Interest (AACI), told The Collective over mail. “The majority of FFRC partners are funded by the food industry; why on earth should they be asked to play the role of a resource centre?”

“FSSAI invites various stakeholders to attend meetings for better understanding. However they do not have any role to decide policy matters etc,” the FSSAI told The Collective via mail in response to detailed queries.

None of the meetings on fortification in the files that The Collective reviewed, however, involved civil society or consumer groups not linked to food businesses. This was a departure from the meetings held, for example, on the contentious issue of the government’s front-of-pack labelling policy, which involved a more diverse set of stakeholders. 

Meanwhile, DSM has nurtured allies in NGOs and governments to promote fortification, and is open about it. “In partnership with governments, the private sector and NGOs such as GAIN, DSM is pioneering the establishment of staple food fortification programs worldwide,” it says on its website. 

By now, the signs of the government’s growing chumminess with DSM had become apparent. The Modi government finalised India’s fortification policy, despite overwhelming evidence pointing towards its lack of efficacy. But internally, it cherry-picked a list of evidence to convince the states to start supplying fortified rice. One of the research papers cited as evidence on this list is by Sight and Life — the non-profit previously functioning under DSM — and DSM itself. The DSM-affiliated research concluded that fortified rice is an effective way to combat malnutrition. The resource centre website too cites multiple studies by Sight and Life.

DSM being the early bird was well-positioned to reap profits. Government tenders for picking fortified rice kernel suppliers list eight premix suppliers allowed — one of them was DSM. The government’s fortification resource centre lists DSM’s Indian group company, DSM Nutritional Products India Pvt Ltd, as a supplier of both fortified rice kernels and centrally licensed premix.

The government’s fortified rice programme has coincided with the healthy growth of DSM’s revenue. DSM Nutritional Products India’s profits after tax saw a near 30 per cent hike in the financial year 2021–22 over its 2020–21 numbers. The 2020–21 year was also a great one for the firm, with a 60.5 per cent rise in profit after tax when compared to 2019–20. In fact, the company’s profit of Rs 20.65 crore in 2021–22 is the best figure it has posted so far, shows a review of the company’s corporate filings. The company’s annual filings, however, do not segregate its revenues based on sale of particular products.

The Collective sent detailed queries to DSM. A spokesperson on behalf of the multinational got in touch with The Collective and assured that the company would respond to the questions. But no reply came through.

Financial welfare of business corporations was on the government’s mind too. Though rice fortification was touted as a health move, government documents reveal an underlying aim to foster the wealth of businesses. The Food Department in a note dated 12 September 2019 said that one of the objectives of its rice fortification scheme was to “give a fillip to the FRK (fortified rice kernel) industry through assured demand”.

The industry includes those who produce micronutrients, units that manufacture machines to mix rice with nutrient powders to make fortified kernels, machines that blend these kernels with normal rice in the right proportion, rice millers and suppliers. 

Calculations by The Collective, based on figures included in official documents, show that under the scheme, the business generated for the blending industry alone would be between Rs1,560 crore and Rs13,500 crore, depending on the type of blending units millers opt for. For the kernel supply industry, meanwhile, a market totalling at least Rs1,800 crore a year would be generated. This in addition to the market created for multinational micronutrient companies.

Fortifying Profits

At least six partners of the Food Fortification Resource Centre have indirect links to the DSM. One of them, Nutrition International, listed DSM as one of its private sector partners until as recently as December 2022. Another partner of the Food Fortification Resource Centre is a supercluster of non-profits. Called the 'Food Fortification Initiative’, it is focused solely on advancing fortification as a means to mitigate malnutrition worldwide. The Food Fortification Initiative also lists DSM as one of its members.

“Food Fortification Initiative (FFI) does not endorse any premix supplier, and this includes DSM,” the Food Fortification Initiative told The Collective over mail. “Premix suppliers do not influence FFI's work globally and are not represented on FFI's Executive Management Team.” 

The Collective found The Initiative’s executive management team, however, does include Nutrition International, which has previously listed DSM as one of its private sector partners.  

And FFI acknowledged working with premix suppliers. It said, “By working together, we achieve more than any of us could independently.”

Some of these global non-profits partnering with the resource centre share a symbiotic relationship with DSM. 

PATH, a tech-focused public health non-profit, has developed the technology widely deployed by developing nations for rice fortification, called Ultra Rice. Its development was partly funded by DSM Nutritional Products.

Yet another partner of the resource centre with indirect links to DSM is the international consortium called Global Alliance for Improved Nutrition (GAIN). Its primary donor is the Bill and Melinda Gates Foundation. DSM’s president of global malnutrition partnerships Mauricio Adade is on the council that advises GAIN’s board.

In 2017, GAIN’s India office informed the Indian government that the government of the Netherlands, the home ground of Royal DSM, was funding GAIN to work on fortification in India.

GAIN isn’t just involved in lobbying for fortification. It also acts as a broker between micronutrient sellers, including DSM, and interested buyers.

In 2009, GAIN set up a ‘premix facility’ where customers can buy the premix of their choice, including that for rice. The facility is akin to Amazon — but just for fortification premixes. GAIN says the facility was set up to “help fortification projects by establishing an easier, more cost-effective way of procuring high quality vitamin and mineral premix”. 

A report by an Indian farmers’ welfare non-profit, the Alliance for Sustainable and Holistic Agriculture, on conflict of interest in India’s fortification pointed out that among the facility’s suppliers is DSM.

In response to detailed queries by The Collective, GAIN said the non-profit did not have any partnerships with DSM in India to achieve its objectives. However, they added, “The only way to achieve this is to work together with partners (governments, businesses, and development partners) at the country and global level.”

GAIN has a history of championing corporate interests. In 2013, the World Health Organization (WHO) refused to recognise GAIN as an NGO over a business alliance network of food companies the group had set up. The alliance basically acted as an international hub to broker and lobby food deals, and offered companies assistance in lobbying for favours in targeted countries.

WHO was concerned about “the nature and extent of the alliance’s link with the global food industry”. Eventually, GAIN got recognition after scrapping its business alliance. Health activists, however, pointed out that the group co-chaired a similar business network, the Scaling Up Nutrition Business Network, along with the World Food Programme.

The World Food Programme works with DSM in implementing its rice fortification programme. In its responses to The Collective’s queries about concerns of conflict of interest , it noted, “WFP has a global partnership with DSM.”  

It then added, “However, there is no formal partnership between DSM and WFP’s India Country Office. WFP in India is not receiving any funds or other resources from DSM.”

Manufacturing Evidence

In the case of the fortification policy, the line between evidence and lobbying is blurry.

Ahead of scaling up fortified food across the country, the food and public distribution department on 29 June 2021 presented research papers to the minister of consumer affairs showing the efficacy of rice fortification. The department discussed 13 papers in the presentation, titled 'Rice Fortification with Iron, Folic Acid, Vitamin B-12'. Of these 13, only 6 studies were conducted on Indian citizens. Five of six of the India-based papers, The Collective found, were affiliated with non-profits that are part of the resource centre and in one case directly with DSM.

“I believe that researchers or studies supported by the food industry cannot be trusted for their findings or recommendations,” Dr Arun Gupta of the AACI told The Collective.

One of the studies is a 2004–05 research paper co-authored by Dr Anura Kurpad. He is a member of NITI Aayog’s national technical board on nutrition and professor at the St John's Medical College, Bengaluru. His study found an increase in serum ferritin levels in children who were given iron-fortified rice. Serum ferritin is linked to an increased risk of diabetes. Dr Kurpad has been publicly warning of the risks of iron-fortified rice. 

The government has listed this paper too, as evidence of the efficacy of fortified rice. 

By 2019, the government was drawing up its centrally sponsored pilot project scheme to distribute fortified rice. Even in the development of this pilot scheme, the food department worked with PATH. The government’s pilot project focused on distributing fortified rice in 15 districts. To enable this, Tata Trusts, PATH, the World Food Programme and Nutrition International have been paired as technical partners with states that evinced interest in the scheme. It is unclear how they were chosen by each state to help execute the scheme.

“Today, World Food Programme (WFP) does not engage with the food fortification resource centre — WFP’s role with the entity was limited to building the capacities of the staff positioned there in the initial months,” said World Food Programme over mail.

On 15 August 2021, the Prime Minister announced that fortified rice would be supplied through the country’s public distribution system (PDS) by 2024. Three days after the announcement, officials at NITI Aayog began drawing up a plan to universalise rice fortification.

For this, they decided to rely on GAIN. A file noting, dated 18 August 2021, by Vedeika Shekhar, an associate at NITI Aayog, said, “A detailed implementation action plan will be developed for the pan India expansion of rice fortification with GAIN. GAIN has been chosen as the development partner because it has been chosen as the focal point for all the development partners by BMGF (Bill and Melinda Gates Foundation).”

Why a group should be chosen as India’s development partner only because the BMGF considers it their ‘focal point’ is not made clear. The role such an entity would play in the policy remains similarly unclear.

GAIN, in its response to queries by The Collective, said that it is not working on rice fortification in India. But it did not respond to the question on NITI Aayog’s file notings that said GAIN has been chosen as the government’s partner in scaling up rice fortification across India. The non-profit also did not respond to queries related to its premix facility, which procures fortified rice kernels from an Indian supplier as well. The Aayog did not respond to any queries.

Plagiarism

Here is the smoking gun to prove the government’s lack of independence in setting unbiased standards for the fortification industry. A plagiarism check run by The Collective shows the government’s fortification manual, which codifies processes to follow in rice fortification, reproduced verbatim portions of a document jointly written by PATH and GAIN in August 2015 for their handouts, raising questions about the originality and independence of the government's manual.

The slight tweaks it made included changing ‘toolkit’ to ‘hand-out’ and inserting ‘India’ once every few sentences. Then-CEO of the FSSAI Pawan Agarwal credited PATH in the handout’s preface: “I appreciate the support of PATH, who has assisted in the development of this technical manual.”

The food department too lifted some portions of PATH and GAIN’s toolkit for its guidelines. It patched the text by erasing references to PATH’s Ultra Rice in its document. The draft guidelines reviewed by The Collective explicitly refer to Ultra Rice, the product PATH created partly with funding from DSM . 

In its guidelines on personnel health, for example, the manual says, “No person who is suffering from any contagious or infectious disease is permitted to enter the packing area or touch Ultra Rice.” When the guidelines were made public in 2019 the sentence was edited to: “No person who is suffering from any contagious or infectious disease is permitted to enter the packing area or touch fortified rice.”

But all this is now history. By the end of this financial year, 80 crore Indian citizens would have no option but to consume the fortified rice delivered through government schemes for survival.

This is the third and last instalment in this series. Read the first and second instalments here and here.

This investigation was originally published here by The Reporters' Collective (www.reporters-collective.in).