Amul plans to procure milk from TN; move faces stiff opposition

After Karnataka, Amul is now planning to start milk procurement in various districts of Tamil Nadu by releasing advertisements asking farmers to supply milk to the company, as a precursor to its full-blown entry into the state.

The move by Amul, owned by the Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), has triggered a major row in Tamil Nadu as it could end the monopoly enjoyed by Aavin, the state’s apex cooperative marketing federation.

As political parties opposed Amul’s plans, Tamil Nadu Chief Minister M K Stalin shot off a letter to Union Home and Cooperation Minister Amit Shah asking him to instruct the Gujarat-based company to “desist” from milk procurement from the milk shed area of Aavin with immediate effect.

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Under the ambit of Aavin co-operative, as many as 9,673 milk producers co-operative societies are functioning in rural areas and they procure 35 LLPD of milk from about 4.5 lakh pouring members. Aavin procures around 30 lakh litres per day and assures the milk producers of remunerative and uniform prices throughout the year.

Amul has recently issued advertisements in newspapers asking farmers in northern Tamil Nadu to supply milk to the company. Stalin also said in his letter to Shah that Amul has utilised its multi-state cooperative license to install chilling centres and a processing plant in Krishnagiri district.

Apart from breaking the monopoly enjoyed by Aavin, Amul’s entry might also reduce the milk procurement by the state-owned cooperative agency as the latter provides a better price each litre.

“While Aavin provides anywhere between Rs 32-34 per litre, Amul buys the same for Rs 36 per litre. Obviously, farmers will supply milk to someone who buys it at a better price. This issue needs immediate attention,” a milk supplier told DH.

S A Ponnusamy, founder-president, Tamil Nadu Milk Dealers Employees Welfare Association, said several farmers will migrate to Amul once it begins procurement due to a host of issues that might eventually leave Aavin in the lurch.

Reminding Shah that it has been a norm in India to let cooperatives thrive without infringing on each other’s milk-shed area, Stalin said such “cross-procurement” goes against the spirit of Operation White Flood and will exacerbate problems for the consumers given the prevailing milk shortage scenario in the country.

“This act of AMUL infringes on Aavin’s milk shed area which has been nurtured in true cooperative spirit over decades. This move by AMUL will create unhealthy competition between cooperatives engaged in procuring and marketing milk and milk products,” he said.

Stalin also told Shah that regional cooperatives have been the bedrock of dairy development in the states and they are better placed to engage and nurture producers and to cushion consumers from arbitrary price hikes.

“Amul is very prompt in making payments to farmers but Aavin isn’t. Entry of Amul is certainly a problem for Aavin whose procurement has come down to around 30 lakh litres a day from 40 lakh litres a day two years back. Also, Aavin doesn’t increase the procurement rate often as the ruling party is against increasing the price of milk sold by Aavin,” Ponnusamy said.

He asked the Tamil Nadu government to utilise this opportunity to “clear the mess” in Aavin and bring in administrative reforms to ensure that the cooperative society thrives irrespective of any new player coming in. “The farmer will stay with anyone who provides the best rate and treats him well. It is time for massive reforms in Aavin,” he added.