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NEW DELHI, Feb. 8

THE Chairman of the Gujarat Cooperative Milk Marketing Federation (GCMMF or Amul), Dr Verghese Kurien, has said that the setting up of market joint ventures by the National Dairy Development Board (NDDB) with State-level dairy cooperative federations ran counter to the Centre's disinvestment policy.

"On the one hand, the Government is wanting to divest its stake in public sector undertakings (PSU). But on the other hand, NDDB, which is a Government of India-owned statutory corporation, is picking up majority stake in marketing joint ventures with individual dairy federations. There is a contradiction here," Dr Kurien told newspersons here on Saturday.

According to him, NDDB was a Government-owned entity, whose Chairman was appointed by the Centre. "There may be lot of interference from State Governments in the running of many dairy federations. But at least technically, the federations are cooperatives, which the NDDB now wants to formally convert into PSUs," he observed.

Dr Kurien said that under the present `Anand' pattern of dairy cooperatives, milk production is done by farmers, with processing and marketing functions being handled by farmer-controlled dairy unions and federations respectively. Thus, all the three `pillars' - production, processing and marketing - were vested with the farmers.

"NDDB is now seeking to transfer the marketing function from the federation to the joint venture, in which it will hold 51 per cent and the federation the remaining 49 per cent share. Considering that the joint venture agreement requires federations to surrender their entire brands and distribution network to the joint venture, it means that the likes of Milma, Verka, Nandini and Aavin will overnight become Government-owned brands," he pointed out.

The GCMMF Chairman said that NDDB was misleading the public by projecting `Mother Dairy' or even the `milk drop' symbol as being owned by cooperatives. "Mother Dairy is a brand owned by the NDDB, i.e., the Government. The cooperative brands are Amul, Aavin, Milma, etc. And unlike Mother Dairy, we (Amul) do not have any equity contribution from the Government and are an independent, professionally managed cooperative with annual sales of Rs 2,350 crore," he added.

Dr Kurien said that NDDB was created in order to replicate the Amul model in other States and promote processing and marketing of primary agriculture produce through farmer-controlled cooperatives. "The NDDB's mandate was to play the role of a catalyst and not to take over the role of the cooperatives. What we are seeing in the last 3-4 year instead is NDDB itself setting up one subsidiary after the other, be it Mother Dairy Fruit and Vegetables Ltd, Dhara Vegetable Oils and Foods Co Ltd and now the various marketing joint ventures," he stated.

As per NDDB's 2001-02 Annual Report, NDDB has invested over Rs 700 crore in its subsidiaries, which includes Rs 219.88 crore by way of equity contribution, Rs 422.37 crore of loans and advances and Rs 30.01 crore of grants. The interest income and dividend received from these subsidiaries amounted to Rs 50.17 crore and Rs 1.38 crore, respectively. Compared to this, total loans extended to milk federations stood at Rs 1,006 crore.

"What this shows is that NDDB's funds are being increasingly diverted to its own companies for commercial purposes rather than for development of cooperatives," Dr Kurien said.

As for NDDB's claim that the joint ventures will uphold the interests of cooperatives, Dr Kurien said that this was not borne out with regard to its recent role in Metro Dairy Ltd (MDL). The Kolkata-based MDL was originally a joint venture in which the West Bengal Dairy Federation had a 47 per cent share, with the private sector Keventer Agro Ltd holding 43 per cent and NDDB the remaining 10 per cent stake.

However, in March 2001, NDDB sold its strategic 10 per cent holding to ICICI, which, in turn, has proposed to offload this to Keventer, giving the latter effective control over the company. "If NDDB was so concerned about cooperatives, why did it not sell its 10 per cent strategic stake to the West Bengal Federation or even some other cooperative?" Dr Kurien quipped.

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