VThe fiercely anti-BJP opposition leaders seem to have found a new bogey business from Gujarat whose name starts with A to link Ambani and Adani. One of India’s most loved brands and a Rs 72,000-crore co-operative giant owned by the Gujarat Co-operative Milk Marketing Federation (GCMMF), Amul continues to fly into the unpasteurized milk of Indian politics.
On May 25, 2023, During his official visit to Singapore and Japan, Tamil Nadu Chief Minister MK Stalin released his letter to Union Home Minister and Cooperation Minister Amit Shah on Twitter, opposing Amul’s purchase of milk from northern districts Was. of the state. “Recently, it has come to our notice that Amul has used its multi-state cooperative license to set up a chilling center and a processing plant in Krishnagiri district and plans to procure milk through FPOs. [Farmer Producer Organisations] and SHG [Self-help Groups] In and around the districts of Krishnagiri, Dharmapuri, Vellore, Ranipet, Tirupattur, Kancheepuram and Tiruvallur in our State,” he wrote.
the milk of co-operation is spilling
They argued that this would create unhealthy competition among milk cooperatives in India and asked Shah to direct Amul to stop all purchases from the Tamil Nadu Cooperative Milk Producers’ Union or Aavin (its commercial brand) milkshed area.
“The ideal in India has been to allow cooperatives to flourish without infringing on each other’s milkshed. Such cross procurement is against the spirit of ‘Operation White Flood’ and will add to the hardships for the consumers in view of the current scenario of shortage of milk in the country.
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Scared by a local ‘Behemoth’
This comes barely a month after Amul’s decision to sell fresh milk and curd in Bengaluru was used by the Congress to capture election milk in Karnataka. Then the Congress and the Janata Dal (Secular) in the opposition claimed that this was part of the Centre’s plan to weaken Nandini, Karnataka’s beloved cooperative milk brand, so that it would eventually be taken over by Amul.
Milk has clearly become a matter of settling political scores. The large number of farmers engaged in dairy farming makes them a valuable vote bank in any state. Stalin has observed that the Congress is cleverly using the issue in neighboring Karnataka and may be trying to replicate it,” says Kuldeep Sharma, a veteran dairy technologist who runs a dairy consultancy. Amul already buys milk from two other southern states of Telangana and Andhra Pradesh.
In Karnataka, the issue was about Amul expanding its sales, while Tamil Nadu is upset over direct purchases from the state’s farmers. However, the common theme here is to portray Amul as a corporate looter in the garb of a cooperative.
While Amul’s business stature (it is one of the world’s 10 largest milk processors), expansion and war chest for pan-India brand identity lend credibility to such caricatures, it is also a lazy explanation to dispel Will be From a grim examination of the health of India’s dairy sector and the co-operative movement’s vanguard in the politics of populism.
roots of a revolution
It is instructive to go back a little in history to understand the birth and success of the cooperative movement.
The Green Revolution is considered to be one of the most important events in the history of modern India. But the benefits of the White Revolution are far more spectacular. Operation Flood or White Revolution in 1970 has now made India the world’s largest milk producer.
The 220 million tonnes of milk produced in 2022 is about 24% of global production. Indians have access to 440 grams of milk a day, which is much higher than the recommended daily average of 387 grams. Milk is by far the most valuable component of Indian agriculture (larger in value than rice and wheat) and the dairy industry accounts for about 5% of the country’s economy.
In 1970, the National Dairy Development Board (NDDB) officially launched ‘The Billion-Litre Idea’ with the goal of taking India’s dairy industry from a drop to a flood. It was to become the largest dairy development program in the world.
Operation Flood will work in a completely decentralized manner. The milk would be collected by the people of the villages; Dairies at the district level will be handled by district unions; Marketing will be taken care of by marketing associations at the state level. This was to ensure that the entire value chain remains in the hands of small farmers. In fact, the White Revolution involved replicating the “Anand/Amul model” across the country.
The White Revolution is broadly associated with three fundamental changes. One, it created a nationwide chain of milk-specific
Cooperatives that can source milk from a network of millions of small farmers owning two or three animals. With access to large quantities of milk, cooperatives can invest in large processing infrastructure.
He set up small rural collection centers with milk chilling and basic quality-checking equipment, where farmers could sell their produce twice a day. Quality checks ensured that farmers’ milk was tested for fat content and they were paid fairly according to the quality and not the quantity of milk. In one go, it brought in a level of quality assurance that the country’s unorganized milk sector was not used to.
Two, the White Revolution introduced new techniques that improved milk productivity. Native Indian cattle breeds such as the Sindhi were cross-bred with European Jersey, Brown Swiss and Holstein-Friesian cows. Cross-breed cattle can withstand hot and tropical Indian conditions, and still produce more milk. This can only be accomplished by making veterinary services and technologies such as artificial insemination more accessible.
Third, and perhaps most important, a highly perishable produce of farmers was effectively linked to urban markets. All regional cooperatives branded their dairy products—from Amul in Gujarat to Sudha in Bihar—and a national marketing campaign around milk and its benefits as a cheap and accessible source of nutrition helped create sustainable demand.
dilute milk
But now, some experts argue, mindless populism and neglect of breeding programs have pushed India towards the end point of benefiting from the White Revolution. There is a legitimate concern about the stagnation of India’s milk production.
“Tamil Nadu is complaining about Amul today like someone crying about theft after leaving their house without lock. It started from Kerala and is spreading elsewhere. Cooperatives controlled by state governments have been subsidizing cheap milk to consumers under the guise of subsidizing higher prices to farmers. This leaves them with no money to focus on cattle breeding R&D. When two purebred cows – Indian and foreign – are crossed, you get a higher hybrid vigor than the first generation or F1 hybrid [the best traits of the pure-bred parents. Hardiness from Indian lines and increased productivity from foreign breeds like Jersey], When you cross generations indiscriminately, productivity is bound to suffer. We have not looked only at our native breed stock,” says Rajeswaran Selvarajan, Professor, Public Policy, Institute of Development Management, Patna, who specializes in the dairy sector.
Thus the populism of the state is destroying the bright spot of Indian agriculture. Tamil Nadu’s Aavin, for example, buys cow milk from farmers at around Rs 34 per liter and the retail price of its standard toned milk is Rs 40 per liter (lowest in the country along with Karnataka). Keeping consumer prices artificially low not only reduces the income of farmers but also strangles the private sector. Private dairies have to pay at least Rs 2 more than state cooperatives to persuade farmers to sell to them, offer better agro-science services to retain their loyalty, and then compete in the retail market.
During the recent Karnataka election campaign, Rahul Gandhi promised dairy farmers that the state procurement subsidy for milk would be increased from Rs 5 to Rs 7. The amount of such subsidy is more than Rs 5000 crore annually.
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havoc of subsidy
“Subsidy is a cancer which affects the entire industry. It is anywhere between 7-20% of the cost of milk in the States. How can the private sector cope with such losses? States can account for this as a recurring loss and finance it. In fact, it is not going to the farmers, but to the consumers. If they had invested that subsidy for more than a decade in improving productivity and infrastructure, the dairy sector across India would have benefitted,” said founder of Hutson Agro, the largest Indian private sector dairy firm, at the Food Conclave and MD RG Chandramogan said. Telangana government recently
In fact, in states like Maharashtra, Gujarat and Punjab where the retail price of a liter of milk is at least Rs 15 higher than in Tamil Nadu or Karnataka, farmer incomes are also higher.
So, when Amul buys from Tamil Nadu, farmers get a profit of at least Rs 2 per liter with increased competition. Why is this such a bad thing?
“Though it is good for farmers, I can understand the concerns of states like Tamil Nadu. Amul cannot use its financial strength to enter new markets. Instead they should hold talks with the state cooperatives and convince them how they will strengthen the local milksheds. It will be in the spirit of collaboration,” says Kuldeep Sharma.
This piece first appeared on The Plate, TR Vivek is the editor and co-founder of the portal.