How do you see the current status of dairy industry in India?
The industry is going through a golden period as it is passing through a very excellent demand with good supply from procurement side. As far as the demand is concerned, urban India is buying more and more branded products whether it is wheat, egg or dairy product. The retail price of milk has increased around 60 percent in the last three to four years. Thus, the farmers are also getting handsome returns. It encourages them to increase their productivity. In India, milk production is increasing at the rate of 4.5 percent per annum while the demand is surging around 10-12 percent. So, it is good for the industry and the farmers.
How do you see the competition between the dairy cooperatives in India?
No, there is no competition in dairy cooperatives in the country, actually they are complementing each other. Amul may be number one brand in India. But if you go to various states, in Karnataka, Nandni is No.1, in Rajasthan, Saras is on the top, in Bihar, Sudha is No 1, so we all are complementing each other. The dairy cooperatives exchange milk and milk powder with each other. In Delhi, milk requirement is more than 70-80 lakh litre per day. One single cooperative or one brand cannot meet the requirement of whole India. Sudha is buying milk from Bihar; Amul is buying from Gujarat and now from some part of Northern India, Uttar Pradesh, Rajasthan and Haryana. So there is scope for everyone.
What challenges the industry faces and how they can be tackled?
The major challenge lies on the production side. It has become very tough to keep the interest of farmers in milk production. New generation of educated farmers do not want to do dairy farming in the traditional way their forefather did. They can continue dairy farming only if it is commercially viable. Besides dairy, they have more options for livelihood. They move to the cities, work in the factories and earn 10-12 thousand rupess instead of working with 2000 buffaloes, getting up at 4’O clock in the morning, picking up cow dung etc. So they only want to go for dairy farming if it is modern and commercially viable. The second challenge is to continue the consumers’ confidence. It can only be tackled by removing the chances of every kinds of adulteration.
How do you tackle the challenges of adulterations?
As far as Amul is concerned, we are checking the quality at four stages. First, we check at village cooperative society level, there milk is automatically collected through testing machines. The second check is done when milk is received from the village cooperative societies. Third is, between processing and packaging, and fourth is when milk is packed and stored in cold storages for dispatch.
In today’s scenario people in rural India are diverting from farm jobs to non-farm jobs. What are the ways that can be adopted to attract them to dairy business?
That is only possible if you make farming more attractive by paying more remunerative prices so that farmers can do farming in modern way by adopting new technologies. The whole business of farming has to be commercially viable. Today’s youth is modern, they go for commercial dairy farms, they build proper shed, milking through milking machines, good practices so that youth is interested in farming in a village.
Although India has seen the white revolution, however some parts of country are still facing deficiency for milk? What are the ways, the demand be met in the future?
Milk production in North, South and West is good. However, there is a deficiency in East and North-East. But our experiment in Bihar and West Bengal indicates that there milk can also be produced. Kolkata is collecting around 300,000 litre of milk every day. It shows that milk can be produced there if the farmers get good return.
What relaxation, in terms of regulation and policies, the industry seeks from the government?
First, Indian dairy industry is owned by millions of farmers. Government should allow free trade agreement with European Union, New Zealand and other countries. Second, dairy should be considered as the part of agriculture so whatever benefits agriculture sector gets that should arrive to the dairy sector too. The subsidised loans available for agriculture should also be available for dair. Cooperatives are owned by the small milk producers, so they should be given relaxation from all kinds of taxation.
You have a long experience in the rural market, so how do you see the changing behaviour of rural consumers today and decade ago?
There is very thin line between the rural and urban consumer. Now, rural consumers have exposure, relaxation and infrastructure etc. There is a demand for all the products. But, the disposable income is rather lower than their urban counterparts, so there is a need to supply products in small packs. Whether it is ice-cream, milk or any milk product, rural India has an opportunity of tremendous growth.
The future plans of your company for the year 2014?
We are going to procure milk from Haryana, Uttar Pradesh, Rajasthan, West Bengal and Bihar so that farmers of these states also get the benefit of Amul’s brands. We are going to set up plants in Faridabad, Lucknow, Kolkata and Bhopal.
Amul has been the most successful cooperative in India, so what measures should be taken by the other cooperatives?
That is only possible if the farmers own the cooperatives. Amul’s model is basically the farmers own, the whole value chain that is production requirements, processing and marketing then only farmer can derive the maximum benefit.