The Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the Amul brand, is likely to do more of something that it has initiated in recent months, procure raw milk from states other than the home turf of Gujarat to meet burgeoning demand in recent years with rise in incomes. This is resulting in milk cooperatives in states like Maharashtra, West Bengal and Bihar finding more of organised buying for their produce. Such buying takes care of marketing that is often a crucial missing link in the farm-to-fork cycle for many food items from cereals to onions. When farmers sell milk through their cooperatives they invariably get a good price and the coming months, when the lean season for milk production sets in, are likely to see a further rise in the procurement prices on top of the recent rises.
The National Dairy Development Board (NDDB) has already indicated its plans to do so, particularly to meet the sharply growing demand in the national capital region, which it supplies through procurement from adjoining Uttar Pradesh. GCMMF, for its part, has raised procurement prices by a compound annual rate of 14 per cent over the past three years. While higher procurement price will mean more fuel for food price inflation — milk wholesale prices have gone up by around 18-20 per cent in the past two years — the great plus for the overall system is that for his milk the farmer gets most of what the consumer pays — around 70 per cent — unlike say in the case of tomatoes or onions. Thus, one of the best ways in which inclusive growth can be promoted and living off the farm made more remunerative is by ensuring that the farmer gets a decent price for his milk, which can account for a good fourth of his overall income.
Despite the foregoing, the macro picture right now is none too good. While overall milk demand is growing by around 6-7 per cent per annum, output is going up by no more than 4 per cent. At this rate, the country will have to go in for regular imports of milk power and other constituents of milk in a decade or so as was the case before the white revolution came. The national dairy plan prepared by NDDB has to be implemented, but even before that nothing works better than price incentives to farmers, which is what the rise in procurement and selling prices foreseen will do. The other requirement is to ensure that the Anand type dairy cooperatives get a leg up as they make up the more efficient part of the cooperative sector. There should be more of the likes of GCMMF and its counterparts in Karnataka and Andhra Pradesh and not handicap the successful models by political interference. This was the case when B M Vyas was ousted from his position at the head of GCMMF last year. Fortunately, his successor, R S Sodhi, himself an old timer in the organisation, appears to have settled down well with GCMMF expecting to raise turnover by a hefty 25 per cent in the current year. In future, luck should not have to be depended upon to move in the right direction.
