India’s milk production increased by over five percent in 2021-22 to exceed 221 million tons, according to Union government data. The ‘Basic Animal Husbandry Statistics 2022’ says that the top five major milk-producing states are Rajasthan (15.05 per cent), Uttar Pradesh (14.93 per cent), Madhya Pradesh (8.06 per cent), Gujarat (7.56 per cent) and Andhra Pradesh (6.97 per cent). Maharashtra is at the seventh position though it was the topper once upon a time.
At present, milk wars are erupting across some states, the latest being between Karnataka and Kerala. They came to the fore when Karnataka complained against the efforts by Amul (the Gujarat Milk Cooperative Federation) to advertise its popular products in Karnataka. Even before the furore has subsided, the Karnataka Milk Marketing Federation has opened its stores to sell its famous ‘Nandini’ brand of milk and other products in several areas of Kerala. This development is highly unethical, defeating the very spirit of India’s cooperation movement and will harm the interests of the farmers, Kerala milk producers have warned.
Despite such churning, Maharashtra leaders have kept themselves aloof from the milk wars, as if willingly withdrawing from the competition to regain its top position. With around 3 crore metric tons production daily and a turnover of Rs.150 crore, Maharashtra was the second largest milk-producing state after Uttar Pradesh a few years ago. Nearly 47 lakh farmer families depend on the milk business for their livelihood or for additional income. The birthplace of the cooperation movement in India, Maharashtra has nearly three dozen major milk cooperatives and two dozen big dairies. While the private sector procures 60 percent of the daily requirement, the share of the cooperatives has declined to less than 40 percent. This situation has hit the producers adversely but the leadership has not paid any attention to this sorry state of affairs. Except for occasional protests and agitations by farmers’ organisations, there is no collective effort to ensure that the producers are paid FRP (fair and remunerative price) for the milk they supply day in and day out.
According to dairy industry analysts, a cold war between the Maharashtra State Cooperative Milk Federation (selling Mahandand branc) and the private sector players has led to the plight of the producers, who keep on demanding higher prices to survive in the activity. The entry of Amul in the state has been smooth since no protest was voiced when it began spreading its network all over Maharashtra. Some other reputed brands tried to follow suit but were mostly unnoticed. Local brands like Gokul, Warana, Krishna, Sonai and Gowardhan have made their presence felt but are nowhere in competition with Amul.
What are the factors that have led to this situation in Maharashtra? Firstly, the state government’s disinterested attitude towards this sector is responsible for the setbacks suffered over the years. Amul is the only major brand in Gujarat and has a tight hierarchy. It has one dairy in one village, one organisation in one district and one federation for the state. In Karnataka, the state government pays a grant of six rupees per litre to the producers. As both, the customer and the producer, are happy with this equation, the brand from outside the state are unable to face the competition. Of course, both Amul and Nandini have maintained a high level of quality and service. Maharashtra exactly lacks in this regard. Moreover, political power games in Karnataka do not harm the milk sector. This problem does not exist in Gujarat. On the other hand, political instability in Maharashtra hits the sector the wrong way.
Demand for milk and its products has been on the rise constantly. Hence, market forces operate freely according to the rules of economics. While private players are able to adapt to the market movements easily, behemoths like Mahanand do not move speedily and hence suffer the setbacks. Accumulation of such drawbacks, absence of effective administrative leadership and marketing teams result in further erosion of the consumer base. At the same time, the milk cooperatives have been grabbing a larger share of the revenue by claiming swelling expenditure. The net result is that the producer is fleeced while the consumer is totally ignored.
As Amul and other players offer higher procurement prices, the producers in the state tend to supply to them rather than to Mahanand, whose purchasing is not as aggressive. As they manage their operations efficiently, it is possible for them to supply to consumers at a fair rate. In this win-win situation, everybody is happy.
Due to political shenanigans, even some small villages in Maharashtra have two or three dairies. Each tehsil and district has several producer organisations, all flaunting their own brands. Efforts to establish a single brand for Maharashtra have failed. Though some local brands are able to survive due to the patronage they enjoy in Mumbai, they are unable to compete with Amul, whose daily procurement is 30 million litres. Compare this with Gokul, which buys just 1.5 million litres a day. Amul’s Mumbai daily sale is 1.2 million litres. Mumbai market is served some other non-state brands, too. Amul’s turnover is of around Rs.65,000 crore. The brands in Maharashtra can’t even dream of touching such a target. This statistics shows the sorry condition of Maharashtra’s milk sector.
The calamity finds its root in the unabashed politics in every part of the state. The empires of local fiefs lead to increasing cost of production since they are more interested in lining their own pockets. While the number of milk cooperatives has been going up, the volume of procurement has been going down. Official apathy and local power play are the reasons for this deterioration but leaders have little interest in making any amends.
Brands like Aarey and Energy were famous once upon a time. The Aarey model was adopted by several states across the nation. Operation Flood had changed the rural economy of Maharashtra. However, it should be noted with regret that the milk sector has been abandoned callously. A leader once, Maharashtra is now struggling to just stand in competition. The situation can change most certainly. But political will needs to assert its authority for this to happen.
