Milking the farmers dry

The hike in procurement price has come as a boost to the 4.60 lakh farmers, who have been demanding better rates for the last few years.
Milking the farmers dry

Chennai

The Tamil Nadu government has gone in for a sharp rise of milk price supplied by the State-run Aavin by Rs six per litre. While it has the citizens up in arms, it has partially met the demand of the 4.60 lakh milk farmers of the State who are in distress and are seeking a hike in procurement price. The hike also comes as a boost to Aavin which is also going through financial troubles.“Tamil Nadu’s milk producing federations which supplies milk to Aavin is battling stagnant prices even as the costs of maintaining cattle and feeding them rises every year. The government has been hesitating to increase the price of milk as they see this issue as votebank politics,” says S A Ponnusamy, president, Tamil Nadu Milk Dealers Employees Welfare Association.

The hike comes five years after the previous one, though the milk producers’ demand for a Rs 10 per litre hike has not been granted. “Every year, the price of cattle feed is on the rise but the price of milk is stagnant. Even an increase after five years is being politicised”, says K A Sengottuvel, president, Tamil Nadu Milk Producers Welfare Association.

Aavin, which has for long been the first choice for people in the state, has of late been unable to meet the entire requirement for milk. On an average, the daily milk requirement for Tamil Nadu is 2.7 crore litres, but Aavin has been able to procure only 29 to 33 lakh litres of which it is able to distribute only 24 lakh litres. The remaining is used for milk products. The big gap between the demand and supply is being filled by a host ofprivate players. 
What ails Aavin?
Aavin and Amul are the country’s oldest public sector dairy enterprises and both of them came into being at more or less the same time. Amul, which is being produced in Anand, Gujarat, however, has seen phenomenal growth compared to Aavin. While Amul procures 2.3 crore litres of milk every day, Aavin has been able to procure much less. Aavin’s turnover is Rs 5,994 crore against Amul’s Rs 45,000 crore. In neighbouring Karnataka, the state-run Nandini milk distributes 77 lakh litres daily.
Backbone of village economy
Milk is the livelihood of people living in the rural areas of Tamil Nadu. It was with their interests in mind that the Dairy department was formed in 1958 during the Kamaraj regime. Later in 1981, it was divided into three tiers, like Amul – the Primary Co-operative Milk Society, District Milk Producers Associations and state headquarters. Around 4.60 lakh small dairy farmers give milk to Aavin and several thousands are waiting for their chance to supply milk. It is not easy to break into the Aavin network that is ruled by the whims and fancies of a few officials. No private player has a network as vast as this. Aavin has lost out allegedly due to heavy corruption, say representatives of Milk Producers Association.

The increase in political influence over milk co-operatives and the nexus between middlemen, Aavin officials and agents have all contributed to the declining standards of the organization.

“Once milk cooperative societies came under political influence and malpractices in co-operative society elections, the societies deviated from their objectives and became the epicenter of corruption,” says M G Rajendran, general secretary, Tamil Nadu Milk Producers Welfare Association.”

“In the early days, buffaloes were more in Tamil Nadu. Country cow breeds like Kangeyam, Umbalaseri, Puliyangulam were very popular. Country cow milk has several nutrients and gives immunity. People were healthy then. Also, first preference was given to calves and only the left over milk used for distribution. When I created Malaiveppankuttai Milk Co-operative Society, I went door-to-door to get members. Cattle loans were available and there were several finance schemes and government sops. People too repaid loans honestly,”he says.

Although there is not much difference in the procurement prices of private players and Aavin, there is a difference in the way they work. For instance, in a private society, milk is evaluated then and there and the message is passed through mobile phone and the amount is credited to the individual account every week. But, evaluation of milk is not done in the Aavin’s primary cooperative society. The secretary of the society fixes the values of fat content and percentage of nutrients, leaving scope for corruption. The money for the milk procured will be credited in the account only after 50 or 60 days. This has driven many dairy farmers to opt to supply to private players.

Further, private players assist dairy farmers by arranging for cattle loans and also procure any excess milk. At Aavin, on the other hand, there are instances of Aavin refusing to procure the milk from the merchant. (Usually, demand for milk comes down during some months and increases during auspicious months or on festive days). In frustration, the merchant goes for distress selling, settling for a very low price. In some cases, the milk is thrown on the roads as a mark of protest because the milk not procured cannot be used beyond six hours of extraction.

“In Aavin, farmers can distribute milk only through the primary co-operative society. If a merchant wishes to start a society, he or she has to run from pillar to post. In the same way, it is not easy to become an Aavin agent, while it is easy to become an agent for Amul, Nandhini or any private player. Also getting Aavin milk immediately for bulk orders is difficult. But it is available in plenty with private parties. That is why owners of many teashops, hotels and caterers go for private players. Only when these maladies are cleared, Aavin will see a growth,” says M Shankar, retired Aavin procurement officer and treasurer, Tamil Nadu Milk Producers Welfare Association.

The role of middlemen
From procurement to sales, Aavin milk crosses different stages to reach the end user. The dairy farmer does not get the entire Rs 32 per litre, as declared by the government. The milk is evaluated for fats and other nutrients as prescribed by the government and what the farmer finally gets is Rs 26 to Rs 29. Of this, the society takes Rs 1.25 as service charge. But when the milk reaches the end user the price is Rs 43 due to the presence of middlemen in the distribution process.

“After going through various stages, the milk reaches Chennai but officials refuse to give the milk directly to the agents but only through distributors, which paves way for corruption and price inflation. Further, fixing dual price for cardholders and for retail sales has allowed scope for former Aavin employees purchase cards in bulk and sell the milk in retail. Uniform pricing will help end user immensely,” says Ponnusamy.

“Aavin administration is a service related job. People are ready to shell out huge sum even for the lowest category post in Aavin. Further there are some who are appointed because of political influence, draw huge sums and involve in corrupt practices. People are ready to spend any amount to get to the top position in 19 unions. If all the corrupt practices are curbed Aavin’s growth will be more than Amul,” Ponnusamy alleged.

Tamil Nadu Dairy Department
When the Dairy Department was created, the requirement for a centralised distribution system was not huge, because at the time, most rural and urban families had cows. In fact, even in big cities like Chennai, one could not see a street without cows till 1970s. Owners of cows used to sell milk door-to-door.

The Madhavaram Dairy came into being in 1962. Milk was procured, stored in cold storage and distributed through bottles. Gradually, it became difficult to rear cows in urban spaces, given the overcrowding and declining open spaces taking away grazing land for the cows. Also then there was traditional paddy crop which yielded chunks of haystacks, which was a good fodder for cows, but now with the hybrid varieties the quantity of haystack has come down drastically, forcing the farmer to go for cattle feed. As a result, there is a decline in the number of cattle owners and people turned to Aavin.

“In 1980, when K A Krishnasamy took charge of the Dairy Department the Aavin distribution was 1,20,000 litres per day. It was expected to double in a year or two. He asked us to suggest ways to increase milk production. Since the State had given us Jersey cow semen and the technology to get hybrid cows through artificial insemination and also the new cattle feed N P 21, we assured the minister that we would increase milk production. As promised, we did it. But our incomes did not increase. Then, we fought for a procurement price of Rs 1.14. The fight is on even today when we are demanding a price hike of Rs 10 instead of Rs 6, (Of this increase, the milk producer gets Rs 4, while Aavin takes Rs 2) as announced by the Chief Minister, says Sengottuvel.

“Politicians give much importance to city dwellers grievances. When they are quiet about owners of tea shops, hotels and sweet stalls making money with the milk which they buy from us at low cost, why should they make big hue and cry when the procurement price is increased,” he asks.

Aavin’s biggest strength is its credibility. Once all the shortcomings are removed Aavin can help boost village economy and employment opportunities in distribution will increase. People will also get adulteration-free milk.
white facts
  • Milk is the livelihood for eight crore families of dairy merchants in India
  • In Tamil Nadu, it is the livelihood for five lakh families of dairy farmers
  • There are 75,50,000 milch cows in Tamil Nadu, of which country cows number 75,000
  • The price of milk from a country cow is between Rs 80 and Rs 100 per litre
  • Kenya is the only country to use 100 per cent country cow’s milk in the world
  • New Zealand and Australia use 50 per cent country cow’s milk
Hero of white revolution
The architect of India’s White Revolution, Dr Verghese Kurien, spent his formative years in Tamil Nadu. His White Revolution in Gujarat was inspired by his years of working in Tamil Nadu. Later, the Karnataka government sought his guidance in developing the dairy sector successfully, but unfortunately Tamil Nadu did not take advantage of his expertise.
Tamil Nadu’s milk producing federations which supply milk to Aavin are battling stagnant prices even as the cost of maintaining cattle and feeding them rises every year. The government has been hesitating to increase the price of milk as they see this issue as votebank politics
- S A Ponnusamy,President, Tamil Nadu Milk Dealers Employees Welfare Association
Once milk cooperative societies came under political influence and malpractices in co-operative society elections, the societies deviated from their objectives and became the epicenter of corruption and with that the development of dairy farmers got stagnated
- M G Rajendran,General secretary, Tamil Nadu Milk Producers' Welfare Association
The hike comes five years after the previous one, though the milk producers’ demand for a Rs 10 per litre hike has not been granted.  “Every year, the price of cattle feed is on the rise but the price of milk is stagnant. Even an increase after five years is being politicised
- K A Sengottuvel,President, TN Milk Producers Welfare Association

Visit news.dtnext.in to explore our interactive epaper!

Download the DT Next app for more exciting features!

Click here for iOS

Click here for Android

Related Stories

No stories found.
DT next
www.dtnext.in