The Hindu Business Line : NDDB: A dream gone sour for Dr Kurien

DR Verghese Kurien is a disturbed man these days. But the legendary 81-year-old dairyman's ire this time round is not targeted at traditional foes - - the Nestles, the Hindustan Levers or the Britannias. Instead, it is directed towards the National Dairy Development Board (NDDB), the organisation that he fathered and nurtured for 33 long years till November 1998.

The trigger for his grouse is NDDB's decision to float a subsidiary marketing company, Mother Dairy Foods Ltd (MDFL), which, in turn, would form independent joint ventures with State-level cooperative dairy federations.

MDFL has already entered into an agreement with the Kerala Cooperative Milk Marketing Federation (Milma) to establish a joint venture - - Mother Foods. While the functions of procurement, processing and packaging of milk would remain with the primary village societies and district dairy unions affiliated to Milma, the marketing of products will be entirely handled by the new company, in which MDFL would hold 51 per cent and Milma the remaining 49 per cent stake. MDFL is currently in talks with other federations also, including in Andhra Pradesh (Vijaya), Punjab (Verka), Rajasthan (Saras), Karnataka (Nandini) and Uttar Pradesh (Parag) - - to form similar marketing ventures.

However, according to Dr Kurien - - who continues to be Chairman of the Gujarat Cooperative Milk Marketing Federation (Amul) - - the proposed joint ventures would render the federations practically redundant, since they will no longer be in charge of marketing of milk products. That function would now be usurped by the joint ventures, in which the federations will not have majority shareholding. "The idea of setting up NDDB was to replicate the Amul pattern in every State, in order to promote genuinely farmer-owned cooperatives that would procure, process and market his primary produce. NDDB's role is make available its funds and expertise for creating such cooperatives and not forming companies that are owned and controlled by the Government and not farmers. NDDB is, after all, a statutory corporation of the Government of India," Dr Kurien said.

While admitting that most federations, unlike Amul, were not professionally managed cooperatives - - in fact, they were run like `regular' parastatals, invariably headed by career bureaucrats - - Dr Kurien, at the same time, felt the alternative did not lie in the joint venture route and undermining the role of federations.

"There are definitely problems in the way federations are managed. But then, one should not forget that the existing cooperative structure has also made the country self-reliant in milk production," he pointed out.

The average milk procurement by cooperative dairies touched 175.96 lakh kg per day during 2001-02, representing an annual income transfer of roughly Rs 7,000 crore to milk producers, making it arguably the country's single largest and most effective rural employment scheme.

Dr Kurien said that if the federations were to be made independent, professionally-run bodies accountable to farmers, the solution had to be found within the cooperative framework and not by supplanting federations with Government (NDDB) controlled joint ventures.

"Cooperatives ultimately are about faith and passion; indeed belief without reason. Unfortunately, the people who are backing the joint venture concept do not seem to be having this kind of commitment and vision any more," he stated, while alleging that NDDB had gone ahead with the joint venture idea based on advice provided by the Netherlands-based Rabobank International. "I feel that this sudden interest in telling us how to manage our dairy sector and cooperatives has a lot to do with India emerging as the world's leading milk producer. Nobody bothered when we were importing huge quantities of milk powder and butter oil," Dr Kurien quipped.

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NDDB: A dream gone sour for Dr Kurien