Patel calls for co-op reforms to become competitive

Amrita Patel, chairperson of the National Dairy Development Board (NDDB) strongly advocated reforms in the co-operative sector if the co-operative sector has to survive the cut-throat competition posed by liberalisation and the private sector.

Talking to reporters Patel said that the growth of the Indian co-operative sector has been slow because of the government and political interference in the sector.

She strongly advocated that milk co-operative societies and federations should be replaced by milk producers companies as it is more efficient and more transparent.

"The co-operative sector's growth has been slow if we compare it with the private sector. The growth the co-operative sector has managed to achieve in 30 years, the private sector has achieved in just 10 years. In fact the growth of co-operatives should have been much faster. Also the co-operative sector has achieved this growth in a protective environment. Now when the markets are open and the sector is facing the competition it should bring the necessary reforms to make the co-operative sector more viable and more efficient."

On the reasons for the slow growth of the sector she said, "The politicisation of the sector and government interference is causing the delay. Gujarat milk co-operative sector does not take a single rupee from the state government, yet there is a co-operative department in the state which has a substantial say in the co-operatives' matters. When there are elections at taluk or district level societies the panels are from political parties. The panel which gets elected may not even contain a single milk producer. This has to stop if the sector really wants to become competitive."

Suggesting that the co-operative sector should be made a single-tier affair she said the producers' companies is an ideal replacement for co-operative societies as it is much more transparent and effective."

The new legislation under the central Companies Act facilitates the co-operatives to dissolve and convert into producers' companies. The present system is slow because it is a three-tier affair.

The system has societies in village, taluk and district. Under the new model district and taluk-level tiers are dissolved and only the village level producers' institutions remain.

The whole zone becomes a producers' company and the milk producers are shareholders. The shareholders can sell their stake only to the other stakeholder so that the company is protected from the private sector mergers and acquisitions."

She said that this way the government and political interference will end and the producers' rights will be protected.

On the need for increasing the milk production, she said we cannot compare ourselves with the West as the situation there is different in the conservation of indigenous breeds and green feed lands.

"The western countries have conserved their indigenous breeds well. They keep the productive animals and send the non-productive animals to slaughter houses. This saves the fodder consumption as well it also maintains the breed quality. Can we do this here? No, as it will hurt our religious sentiments. Moreover, they allow mating between bulls and cows of the same breeds. That way the indigenous genes and qualities are maintained. We need to take this challenge of conservation of our indigenous breeds."

On organised sector's share in the milk meant for the urban areas, she said, "Fifty per cent of the milk produced is consumed by villages. While the rest is meant for the urban areas. Of that 50 per cent only 30 per cent goes through the organised sector while 70 per cent goes through the traditional sources like halwais and milkmen. This pattern also needs to be reversed."