Bhopal: When Madhya Pradesh signed an agreement with the Gujarat-based National Dairy Development Board (NDDB) last month to boost milk production in the state, Chief Minister Mohan Yadav was most gung-ho.
After the Madhya Pradesh Cooperative Dairy Federation (MPCDF) entered into a five-year agreement with NDDB, he set an ambitious target of bringing about “a milk revolution” in the state by doubling its milk production capacity over the next five years.
But not everybody was celebrating the deal.
The decision sparked fierce criticism not only from the opposition Congress party but also from dairy unions in Madhya Pradesh, who fear Amul will eclipse the local brand, Sanchi, which has long been almost synonymous with the state’s dairy business.
The Congress demanded a ‘white paper’ on the deal, with state party president Jitu Patwari asking which “Gujarat lobby” the state government intended to benefit and whether the agreement was aimed at benefiting Gujarat’s Amul at the cost of MPCDF’s milk brand, Sanchi.
“The NDDB’s administration of milk federations in MP would rob the local milk cooperative movement of its soul. It’s not a business of milk but of democracy and self-reliance of local milk cooperative committees, too,” said Patwari.
The Congress has also accused the state government of taking decisions unilaterally without consulting farmers.
The government’s decision also faced stiff resistance from milk unions in Madhya Pradesh. Already upset that there have been no elections in any of the unions except Indore for decades, union leaders demanded that the government fix Sanchi’s problems instead of bringing in outside players.
Many were angry because soon after the signing of the Memorandum of Understanding (MoU) with NDDB, the Madhya Pradesh government handed over administrative control of MPCDF to NDDB.
Tawar Singh Chouhan, the last elected representative of the Indore Dairy Sangh, was among those who vehemently opposed Amul’s entry into Madhya Pradesh.
“If the government had proceeded to bring in Amul with their plans to amend the Cooperative Societies Act, we were prepared to go to court. But now, when the agreement has been made with NDDB, we are still struggling to get our hands on a copy of the agreement. The day we get it, we will approach the court,” he said.
He added that the Indore Dudh Sangh had sought a loan from NDDB about three months ago, but the organisation didn’t help.
“We approached NDDB, but it didn’t help us. So we used our own fixed deposit and put up a milk powder producing plant,” he said.
Tanwar added that the Indore Dudh Sangh has been turning a profit and the government should get NDDB to first improve the functioning of Gwalior and Jabalpur, which were loss-making, instead of handing everything to them.
Also Read: MP forest dept to use low-altitude helicopters to herd crop-raiding wildlife away from farmlands
Operation Flood
The Madhya Pradesh state dairy federation was set up in 1980 under the Operation Flood programme that promoted the setting up of farmers-run cooperatives following the success of Amul in Gujarat. It began with processing plants in Ujjain, followed by Indore and four other divisions.
But over the years, the dairy federation has been hurt by poor marketing, stiff competition from Amul and low infrastructural investment.
Today, Madhya Pradesh is the third-largest milk-producing state in India after Uttar Pradesh and Rajasthan, but ranks 11th in packet milk sales in the state.
The milk cooperative sector in MP has a three-tier structure. The MPCDF is the apex body that operates the brand Sanchi under which milk and its affiliated products are sold within the state. Sanchi also manufactures ghee and other products, including ice cream.
Under MPDCF come the six divisional milk unions covering the six major divisions of Bhopal, Indore, Ujjain, Gwalior, Jabalpur and Sagar (also known as Bundelkhand).
These six divisions collectively tap roughly 11,636 villages through their dairy cooperative societies (DCS) to collect milk from farmers.
Through the six divisional unions, the milk cooperatives collect roughly 10 lakh litres of milk per day, of which seven lakh litres of packet milk is sold.
Of the six unions, those in western Madhya Pradesh—including Indore, Ujjain, Bhopal and Sagar—turn in a meagre profit or break even, while those in Gwalior and Jabalpur have been incurring losses, with growth across all six unions plateauing.
“The cooperatives collect merely 1 percent of the total milk produced in the state. At the same time, it sells less than what it has procured, which means there needs to be work undertaken to not only increase procurement but also enhance its marketing,” a senior MPCDF official told ThePrint.
From Amul to NDDB
Soon after taking charge as chief minister, Mohan Yadav first chaired a meeting on 10 January 2024 with the officials of the Gujarat Cooperative Milk Marketing Federation, which runs the brand Amul.
The government planned on tying up with Amul to improve Sanchi.
But since the two were separate brands run by state cooperatives, the move threatened Sanchi’s existence.
Moreover, Sanchi was already facing direct competition from Amul, a much bigger brand with a presence not just in Gujarat but across India.
It has been aggressively expanding in Madhya Pradesh, which has essentially threatened Sanchi’s share in both milk procurement and sales.
With Amul being a state-registered cooperative in Gujarat’s Anand district, it ideally required a No Objection Certificate (NOC) from the Madhya Pradesh government to procure milk from federations in the state.
Instead, Amul has been procuring milk from farmers in Madhya Pradesh directly through its agents and a private dairy. It has also set up milk processing units with the capacity to process 5 lakh litres of milk in Ujjain, the chief minister’s home district.
“There were three scenarios, either the MP milk cooperatives were fixed in-house with the state government providing for funds, the second was tying up with Amul or the third option was roping in the National Dairy Development Board (NDDB), which is an expert body,” a Madhya Pradesh government official told ThePrint.
The road ahead for NDDB
The Madhya Pradesh government isn’t deterred by the criticism.
It is aiming to increase the footprint of district cooperative societies across the state through NDDB.
Of the 23,124 village panchayats in the state, dairy cooperative societies are active in merely 6,088 village panchayats, which is 25 percent of the total village panchayats.
Sanjay Govani, general manager of NDDB, told ThePrint that NDDB is working out a yearly plan to gradually reach 9,000 panchayats in the next year and all of them over the next five years.
Govani said NDDB will also be working to reach out to consumers who purchase loose milk instead of milk packets.
“In Madhya Pradesh, the sale of packet milk—including all brands combined, be it Sanchi, Amul, Mother Dairy or others—is only 10 percent of the total milk sold,” Govani said.
“The remaining market is for loose milk. If we can convey to people the benefits of pasteurised milk, that itself will tremendously increase sales of milk without cutting into each other’s market,” he added.
NDDB will also be hiring 50 to 60 senior managers, who would be paid through NDDB, to transform Sanchi.
The minister for animal husbandry, Lakhan Patel, said NDDB would continue with the brand name Sanchi and NDDB was working to improve the quality of products while equipping the state with better infrastructure.
According to Govani, market studies by NDDB show a strong attachment to the Sanchi brand in Madhya Pradesh, which NDDB is working to deliver upon.
The Madhya Pradesh government has partnered with NDDB to expand the cooperative brand of Sanchi beyond the state.
But many others are still skeptical of NDDB’s capacity to transform Madhya Pradesh’s milk cooperatives.
“One of the biggest problems faced by Sanchi was its poor marketing. It is easier to increase village committees and collect milk, but we are yet to see how NDDB plans to increase milk sales across MP over the next five years that it will be holding operations,” said Girish Paliwal, who is affiliated with the Bhopal Milk Union.
“It is too soon to comment; for now, it is just wait and watch.”
(Edited by Sugita Katyal)
Also Read: Madhya Pradesh DGP’s order directing cops to salute MP, MLAs draws censure from both Congress & BJP