Amul to foot Lanka venture losses

GCMMF will make the milk powder plant viable before handing over to local authority

The Gujarat Co-operative Milk Marketing Federation (GCMMF), which markets Amul brand products, will absorb the losses incurred in the first year of Sri Lanka project before handing it over to the local authority.

GCMMF has expressed its readiness to establish a milk powder plant, with a capacity of processing 2 lakh litre milk per day at an estimated investment of Rs 10 crore. The decision was taken following the visit of Anura Kumara Dissanayake, Sri Lankan minister for agriculture and livestock, in last July.

Varghese Kurien, chairman, GCMMF told Business Standard, said: "The project is our gift to the neighbouring nation. We are willing to absorb the initial losses during the first year of operations. The GCMMF will make the project viable before handing over the operations to the local agency."

The GCMMF is aiming at replicating the 'Anand pattern' in Sri Lanka. The GCMMF also aims at making Sri Lanka self-reliant in dairying and boosting employment opportunities through co-operative model.

"Traditionally, Sri Lanka has been the major global trader for tea and spices and has not paid much attention on being independent in dairying. The adoption of co-operative dairy model will help the nation become self- reliant," said Kurien. The growth of dairy industry will escalate the employment opportunities for the youth, he added.

Meanwhile, GCMMF has also suggested the Sri Lankan government should buy milk powder from India to avail the benefits of proximity. At present, Sri Lanka imports about 53,000 tonne of milk powder annually from New Zealand and Australia. The export of dairy products from India in 2002-03 to Sri Lanka was 21,440 MT, valued at Rs 153.59 crore.

Talking about the differences between National Dairy Development Board (NDDB) and the Federation, Kurien said, "The NDDB is violating the mandate specified by the NDDB Act 1987 by negating the co-operative structure. The Act clearly states that the board will promote the co-operatives through 'Anand pattern'. The NDDB dose not seems to believe in co-operative structure."

The NDDB was created in 1965 in response to the then Prime Minister Lal Bahadur Shastri's call to replicate the 'Anand pattern' all over the country. Later, the Board, registered as a society, and the Indian Dairy Corporation, a company formed and registered under the Companies Act, 1956, were merged under the NDDB Act 1987.

"The co-operatives in some of the sectors have gone bust because they were not the genuine co-operatives. No entity can become a co-operative body just by adding a tag to its name. You should have a faith in the values of co-operative," said Kurien referring the recent co-operative banking bust in Gujarat.

Kurien has demanded a joint parliamentary committee (JPC) to probe the conduct of the NDDB.