Financial Daily from THE HINDU group of publications
Friday, Jul 19, 2002
Financial Daily from THE HINDU group of publications Friday, Jul 19, 2002 |
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Agri-Biz & Commodities
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Dairy & Dairy Products Premier co-operative dairy in a quandary J. Nanda Gopal
HYDERABAD, July 18 THE Andhra Pradesh Dairy Development Cooperative Federation Ltd, the premier milk procurement agency, has lost much of its sheen. The federation, with its vast infrastructure and network, could have performed much better on its own strength but has not been able to do so as it is saddled with excess staff in almost all departments, says Mr Debabrata Kantha, Managing Director. Absenteeism had gone up to an unacceptable level of 41 per cent, he says. The federation, whose aim was to benefit farmers by offering higher procurement rate through ploughing back profits, was way behind its goal as whatever little profit it made, had to be spent on staff salaries and benefits regardless of their productivity. Though it has reduced the staff strength through the voluntary retirement scheme (VRS), the wage bill still amounted to Rs 5 crore a month. Another major factor in milk procurement is, unlike private dairies, the federation is obliged to buy more than its requirement in the flush season, September-March, with a view to converting it into powder and other products for sale. In the lean season, April-August, the powder is converted into milk to supplement the requirements of consumers. Mr Kantha said the federation had to sell its huge stocks of surplus milk powder at cheap rates during the lean season to private dairies and thus become a loser financially. The federation, which is said to be second only to Amul in offering to farmers high rates for 1 kg fat content, is in an unenviable position as the problem lies not in inflow of money but in spending it. In tune with the current trends, it wants to be technology-driven and become slimmer but to do that it needs at least Rs 70 crore, which should come either from the National Dairy Development Board or the State Government. The NDDB is willing to offer the aid on condition that the affiliates of the federation transform themselves into mutually aided co-operative societies that are independent of State control. The Government has decided to facilitate such transformation. The aid would be in the form of loan and grant. About the possibility of exporting the products to other countries, he said that in terms of quality and price, federation's products were no match to those of New Zealand and Australia where operations right from milking to processing to marketing were mechanised. In fact, the domestic market was so huge, it could generate enough demand if properly tapped. The `Vijaya' brand products, which had become popular in the metros and earned respectability for quality, were facing rough weather due to lack of consistency in supply, inadequate promotional activities and competition from MNCs. The federation lacked the financial muscle to set matters straight, he said.
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