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and professionals who run the organisation.
This governance structure influences the
functioning of the entire chain from the state
federation to the village societies and thus
significantly impacts farmers’ involvement
and benefits. The government influences
the decisions of the board members of a
federation. For instance, if the government
feels that increase in milk prices may affect
consumers, the board does not hike the
price, which affects dairy farmers. Moreover,
several cooperatives are reportedly defunct;
no stock taking or studies have been done
by the State.
30
The primary differences between the
GCMMF cooperatives and other state
cooperatives are price and services. In
Gujarat, the price paid to farmers is based
on fat content; there is regular testing of
each farmer’s milk supply. In most of the
other states, there is hardly any testing of
milk. In other state cooperatives, the village
society president wields a lot of power and
typically decides the prices paid to farmers.
Reportedly, farmers with some degree of
influence receive higher prices than others.
Being the lead organisations, the coopera-
tives also set a benchmark for prices paid
by other buyers. Thus, if the farm gate price
paid by the cooperative is low, other players
also pay a low price.
2. Producer companies
To insulate dairy farmers from political
interference and to counter the increas-
ing competition from private players, new
forms of organisations such as producer
companies are being considered. This form
provides the same legal and regulatory
framework as enjoyed by other companies
but protects the members’ interest as per the
basic principles of cooperation: voluntary
and openmembership, democratic member
control, member economic participation,
autonomy and independence (Box 4.8).
Since 2005, NDDB has been promoting
dairy producer companies and this model
is extended to eight states. Due to frequent
changes in cooperative laws in AP affecting
the autonomy of cooperatives, many of
the dairies registered under the Mutually
Aided Cooperative Societies Act are now
transforming to producer companies. Apart
from NDDB, NGOs and technical-service
providers have also promoted dairy pro-
ducer companies that are operational in
AP, Bihar, Gujarat, Haryana, Maharashtra,
Punjab, Rajasthan and Uttar Pradesh.
However, unless these producer compa-
nies are linked to a well-established market-
ing network such as NDDB or a private dairy
company, they will face serious problems
in marketing milk. Indur Milk Producer
Company is functioning in Nizamabad
district of Telangana and has been pro-
moted by Indur Intideepam Mutually
30
New Milky Way by Jyotika Sood, published on
15 February, 2015. Available at:
-
toearth.org.in
Box 4.8:
Dairy producer companies are
the new generation co-operatives
Till the economic liberalisation in 1991,
cooperatives grew in a protective environ-
ment without any competition. And this
phase made India one of the largest milk
producers in the world. Now these coopera-
tives that we had set up in the last 50 years
are failing us because politics is overtaking
them. Barely 15 per cent of our villages have
cooperatives. The private sector is entering
only where cooperatives were established to
exploit the existing infrastructure. They are
not taping the potential of other villages and
promoting milk production there. This will
lead to a milk crisis. The private sector has got
more processing capacity than cooperatives
today and they have done it in much shorter
time than cooperatives. The private sector is
going to grow; the cooperatives will also grow
but at a slower pace. So, NDDB is trying to
introduce the producer company model in
villages that are not covered by cooperatives or
where cooperatives are defunct. So in coming
years, cooperatives and producer companies
can together compete with the private players.
Amrita Patel, Ex Chairperson, NDDB
Source:
New Milky Way by Jyotika Sood.
