Success in dairy industry shall continue to be in the ability to build a robust procurement network which gives raw material cost advantage along with assurance of regular supply. Large MNCs in India have failed in the dairy sector on this account. “Aarth Shakti” (money power) has not got translated into “Lok Shakti” (people power). Moga (Nestle) and Etwah (Levers) have remained laboratory cases while Anand (Amul) has got replicated. A strong backward integration in the form of cattle-feed supply, vaccination availability, breed improvement programmes and profit-sharing with farmers are some of the things that none of the private sector companies nor the MNC’s have been able to replicate and amplify. Farm gate price paid for milk in India is the highest in the world largely due to a strong co-operative presence. Failure of integrated dairy experiments like “Aarey” has not deterred a non-milk co-operative to branch out in the same direction recently. Also joint ventures and foreign collaboration have become order of the day.
Lately, India is under intense pressure to open up its market in dairy produce, especially cheese, from European nations. The EU is keen to get any market opening abroad in a bid to compensate for the troubles facing milk farmers at home. A few years back there was a sudden interest in advising India how to manage the dairy sector and cooperatives when it was emerging as the world's leading milk producer. No doubt the advice came from a Netherland based entity. The US dairy industry is also itching for access to India and the U.S. government is examing legal alternatives for access.
In Europe, when the entire milk requirement for production of cheese and value added products are satisfied “profit is maximized”, the remainder is processed into butter and SMP (Skimmed Milk powder), often referred to as ‘residual production’. This is distinct from patterns of production that is followed in India where priority is given to production and distribution of liquid milk for masses. In India, SMP is important for curbing excess supply due to strong seasonal fluctuation of milk and reconstituting the same during milk shortages.
The recent incident of protestors vandalizing the tankers of imported milk only demonstrates the lack of understanding by the political class of machinations of the large milk producing nations. It is even more surprising that when a minister promotes private sector dairy in his constituency instead of a co-operative dairy, these protestors don’t even raise an eyelid for the local farmers. Perhaps it is time that India demonstrates that if it can produce 112 MMT (Million MT) of milk (09-10) compared to only 10.40 MMT in 1961, it also knows what the best way to manage a growing dairy industry. For this, Indians need to move from “Me” to “We” mentality.
The dairy sector has assumed critical importance for India as it provides work and income to landless farmers. The ruling dairy and milk managers are yet to demonstrate the leadership quality, passion and logic in negotiations, political acumen and stubbornness that Dr. Verghese Kurien “father of White revolution” had demonstrated. Once confronted abusively about the market share by an arrogant New Zealand High Commissioner, Dr Kurien had fittingly replied “If all of us Indians decide to get together and spit on your country, your country will get drowned in our spit”. Unfortunately, the current breed of milk leaders are more concerned in protecting their own turf by creation of ‘services’ to ensure that they remain at the helm of affairs.
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