1. (SBU) SUMMARY: Calling 2008 the "Year of Food Supply and Safety,"
the Mongolian Government has launched a new program to improve
food-handling procedures, raise awareness of food-quality issues,
and decrease the country's dependence on imported food. The
program, which comes in response to skyrocketing food prices and
highly publicized incidents of food poisoning, is also aimed at
improving veterinary services to raise the quality of domestic meat
and milk; increasing import surveillance; improving food transport
and storage conditions; increasing the number of testing labs at
border crossings; and reclaiming farmland to increase crop yields.
Unsafe food is regularly imported or smuggled in from China and
Russia, and inspection authorities lack the capacity to prevent its
sale and distribution through Mongolia's enormous gray economy.
There is also a general lack of awareness among Mongolians about
food safety issues. With food prices soaring, many Mongolian
consumers are paying more attention to the price tag than to safety
concerns. END SUMMARY.
"THE YEAR OF FOOD SUPPLY AND SAFETY"


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2. (U) Reeling from skyrocketing food prices (ref A) and several
fatal food-poisoning and contamination accidents, the Government of
Mongolia (GOM) declared 2008 the "Year of Food Supply and Safety."
Earlier this year, more than 50 people were poisoned and 16 died
after consuming domestically produced vodka tainted with methanol
smuggled from China (refs B, C) past bribed Mongolian Customs
officials. On May 2, one person died and over 150 people were
hospitalized in western Bayan-Ulgii province after being exposed to
food poisoning at a wedding reception. According to the National
Center for Communicable Diseases, last year 379 persons suffered
from documented food poisoning in Mongolia; there were no cases of
death. So far in 2008, there have been approximately 200
food-poisoning outbreaks ("outbreaks" defined as affecting ten or
more people). From 2002 to 2005, Mongolia recorded nine full-blown
epidemics spawned by food-borne illnesses.

PROMOTING DOMESTIC FOOD PRODUCTION, REDUCING IMPORTS


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3. (SBU) The initiative aims to promote domestic food production and
reduce the country's dependence on imported food. It is also
intended to raise public awareness and information on the quality of
food products, and to ensure hygienic and safe food production and
processing. The GOM has set up a working group for Food Security
and Policy, chaired by the Minister for Food and Agriculture (MOFA)
Ts. Gankhuyag and made up of representatives from the Ministries of
Industry and Trade, Health, the Center of Standardization and
Measurement, the State Inspection Agency and the Association for the
Protection of Consumer Rights. (Note: MOFA's point man on food
safety is one of several politicians believed to be behind the
"disappearance" of some US$22 million in wheat monetization funds
through theft, fraud and mismanagement between 1993 and 2004; ref D.
End Note.)

IMPROVING VET SERVICES, IMPORT SURVEILLANCE


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4. (U) In addition, the GOM plans to spearhead several
sub-initiatives, including improving veterinary services to ensure
higher meat and milk quality standards; increasing import
surveillance; and improving conditions for the transport and storage
of food items. Unfortunately, the GOM has provided few details on
how it hopes to achieve these goals. To wean Mongolia off its

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dependence on imported food, the GOM launched its "third campaign
for reclaiming virgin lands" (ref E), which aims to increase harvest
yields per hectare and to meet 100% of domestic demand by 2010.
(Note: Experts have concluded that this goal will be difficult, if
not impossible, to achieve. End Note.) The GOM is also promoting
technological improvements in the packaging and labeling of food
products.



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5. (SBU) The GOM launched the initiative after several smaller-scale
food safety initiatives failed. Training sessions and seminars by
the State Special Inspection Agency (SSIA) on proper food handling
and storage techniques failed to bring about noticeable
improvements. Similarly ineffective were efforts by the UN's Food
and Agriculture Organization (FAO) and World Health Organization
(WHO) to encourage Mongolian industry to adopt Hazard Analysis at
Critical Control Points (HACCP), good manufacturing practices (GMP),
and good hygiene practices (GHP) -- key components of the safety
management systems in the food supply chain. FAO and WHO
recommendations for Mongolia's 1999 Food Law also went unheeded.
FAO is now working with the MOFA to revise the National Program for
Food Security, which was first developed in 2001 but did not
anticipate food price increases and food shortages.

MORE THAN HALF OF FOOD SOLD WITHOUT GOM PERMISSION


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6. (U) According to the SSIA, responsible for the enforcement of
government food-safety policies, more than 50% of food items sold in
Mongolia last year was sold without proper permission from the
appropriate inspection authorities. Nearly 29% of the items failed
to meet minimum standards for frozen food handling and storage, and
14.6% were improperly packaged. (Note: The Minister of Food and
Agriculture recently said 80% to 90% of all food products consumed
in the country did not meet minimum quality and hygiene standards.
The source of these statistics is unknown. End Note.) In 2007, the
SSIA carried out 98,100 inspections of food-production companies,
restaurants and food-service businesses,, and issued 1,800
suspensions, of which 1,200 "serious offenses" resulted in the
closure of the establishment. Some 900 million Tugriks (US$800
thousand) worth of food was seized and destroyed, and fines and
penalties of 270 million Tugriks (about US$255,000) were imposed.
(Comment: Given the hundreds of millions of U.S. dollars spent on
food in Mongolia each year, these figures do not appear to track
with claims that 80 to 90% of all food products are tainted in some
way. End Comment.)

INSPECTION CAPACITY REMAINS WEAK


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7. (U) Inspection capacity remains weak, although the SSIA has over
700 inspectors nationwide. Some 300 are based in Ulaanbaatar, and
60% of them are dedicated to food-safety issues. The vast majority
of Mongolia's food-related industries (food processing, restaurants,
etc.) fall within the country's enormous and unregulated grey
economy. These businesses usually prepare and handle food at homes
or gers with little thought about hygiene or proper handling.
Effective control requires SSIA to rely heavily on tips from the
public and to work closely with local police.

PREVENTION, RATHER THAN CONTROL


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8. (SBU) The SSIA is currently establishing a certificate program to
persuade food-related businesses to improve their internal controls.
However, the current inspection regime, which emphasizes control
over prevention, only encourages food producers to avoid taxes,
heavy fines and seizure/destruction of their products by changing
labels or expiration dates on packaging, hiding excess products from
inspectors, and selling them on to stores and restaurants. The

ULAANBAATA 00000234 003 OF 004


recent vodka deaths are a case in point. The company that produced
the tainted vodka deliberately deceived inspectors by illicitly
producing the spirit at night and fudging production numbers to
avoid taxation. Afterward, a spot inspection of vodka producers
showed that 5% did not meet standards, and had to be shut down.

MANY UNSAFE FOOD PRODUCTS FROM CHINA, RUSSIA


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9. (SBU) According to Y. Sanjmyatav, Chair of Parliament's Standing
Committee on Environment, Food and Agriculture, much of Mongolia's
"bad" food comes from China and Russia. Enterprising suitcase
traders purchase food for import to Mongolia from largely
unregulated gray-market producers in northern China. The sheer
numbers, believed to be in the thousands, make border inspections
difficult. Substandard food is frequently smuggled in, either
through porous, uncontrolled borders, or by bribing customs
officials (as was the case with the methanol from China that led to
the vodka deaths described in ref B).

DAIRY PRODUCTS POSE SPECIAL PROBLEMS


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10. (SBU) Specialists of the Mongolian Food Association are
especially concerned about the quality of milk and milk products
imported from China and Russia. Russian yeast for yogurts, they
complain, is often of poor quality; Russian production standards are
low, and give little consideration to hygiene. (Note: Even with 40
million livestock, Mongolia has to import 70% of the country's total
urban demand for milk and milk products, due to lack of distribution
capacity and high transport costs. Only 1.7% of domestically
produced milk is pasteurized. End Note.)



11. (SBU) In 2007, 30 tons of pesticide-laden wheat from Russia had
to be destroyed and a further 600 tons did not meet human
consumption standards and were converted to use as animal fodder.

IMPROPER TRANSPORT


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12. (U) According to the SSIA, 71% of all imported food is
transported inappropriately, exposing it to contamination, and at
least 9.7% of imported food was past its expiration date. (Note:
Long travel time to markets and false labeling by some Chinese
companies makes detecting outdated food particularly difficult. Of
course, some Mongolian firms do the same. End Note.



13. (SBU) Mongolia currently has little capacity to test imported
food. Recently, the GOM reached an agreement with China on US$1
million in funding to build border labs, to be overseen by Border
Force and Customs personnel. Meanwhile, Parliament is considering
legislation that would only allow larger, more established
distributors to import food products. This would allow inspectors
to keep closer tabs on food imports. Smaller importers oppose the
GOM's intrusion into what they feel should be a market-driven
process; they also feel the proposal would favor large,
politically-connected importers.

GOM'S TESTING SYSTEM FLAWED


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14. (SBU) The GOM's testing system is duplicative and wasteful. One
importer of fine wines reported that he had to provide Customs with
samples of each wine for testing. After Customs gave its approval,
the SSIA demanded that the importer conduct the same tests at a lab
approved by the SSIA, as the SSIA did not approve of the lab used by
Customs. In addition, the importer argued that the testing
standards used by both agencies were vague, out-dated, and
arbitrarily imposed on him, but not on other importers. The
importer complained to both Customs and the SSIA about their
processes, suggesting that they combine testing regimes to more

ULAANBAATA 00000234 004 OF 004


efficiently use their meager resources and to avoid delays and
costs. However, both allegedly rejected the suggestion. We have
heard similar complaints from those seeking to import meat, poultry,
and other food products.

POOR STORAGE FACILITIES, VET SERVICES


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15. (SBU) Imports are by no means the only source of dangerous food
in Mongolia. The country is sorely lacking adequate storage
facilities and refrigeration, for both imported and domestically
produced food. This often results in severe spoilage in the warm
summer months. Mongolia's meat supply comes mostly from domestic
sources, but only meat destined for the capital tends to be
certified as safe by a veterinarian at the time of slaughter.
(Note: There is also concern that livestock, as well as fish, are
ingesting increased levels of mercury and cyanide, due to artisanal
mining. End Note.)

COMMENT


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16. (SBU) GOM officials hope that by declaring this the Year of Food
Supply and Safety they will be seen as proactively addressing these
issues. Indeed, the President has declared that food safety and
supply are now top GOM priorities. Privately, however, officials
opine that there is an almost willful lack of awareness among
Mongolians about food safety, despite the attention it has garnered
in the media. However, many consumers have little faith in the
pronouncements of government officials, who are seen as either
turning a corrupt blind eye to tainted food products, or having a
personal business interest in food importation or production. Few
Mongolians realize they can demand certificates from the SSIA
attesting to the quality of the food they purchase. Consumers
continue to patronize gray-market food establishments, and with food
prices rising, this trend is only expected to continue. Price,
rather than safety, is the determining factor when purchasing food.

GOLDBECK