The Hindu Business Line : Kurien flays NDDB's move to import milk powder

THE Chairman of the Gujarat Cooperative Milk Marketing Federation (GCMMF), Dr Verghese Kurien, has ridiculed the National Dairy Development Board's (NDDB) move to import 6,000 tonnes of milk powder as part of its plan to build a `strategic reserve' for the country.

"Only recently has the Government proudly proclaimed that India has become the world's largest milk producer. And now they want to build a strategic buffer for the country, that too using milk powder imported from Europe. This has never happened before. Even the 60 million tonne public foodgrains stocks has been created out of rice and wheat procured from our own farmers and not imported from other countries," Dr Kurien told Business Line.

According to him, it was an established practice for dairies to conserve surplus milk procured during the flush season (October-March) in the form of milk powder and white butter and use these stored commodities for recombining into milk in the `lean' summer months. Reserves, too, are built when milk powder production reaches its peak and prices are at the lowest range.

"During the last three years, when dairies here had abundant powder stocks and prices ruled below production costs, NDDB did not build any buffer or pay intervention prices. Now, it wants to build a buffer using imported milk powder at the cost of our producers," Dr Kurien quipped.

He contended that there was no point in importing powder at this point of time when the country has had good monsoon rains. "The grass has already grown and once our cows and buffaloes eat this, you will see milk production levels shooting up. If the imported powder arrives precisely then, it will depress prices and incomes of our milk producers," Dr Kurien added.

The NDDB, in a press release issued on Sunday, defended imports on grounds that the average milk procurement by co-operative dairies had fallen by about three lakh kgs per day (LKPD) this year, even as their sales had risen by 10 LKPD. In other words, there was a domestic shortfall of 13 LKPD of milk, translating into 130 tonnes of powder per day. This shortfall has to be necessarily met through imports. Import of 6,000 tonnes would help bridge the shortfall for about 45 days.

GCMMF officials say that NDDB's argument makes sense only if the imported powder were to arrive immediately. "But if the same powder comes in after 45 days, when milk production here would have normalised with the onset of the flush season, you could have a daily deficit of 130 tonnes turning into a daily surplus of 130 tonnes in the market. The implication on prices are obvious," they pointed out.

Dr Kurien said that NDDB's claim that it would be able to import the required quantities within 10-15 days was tenable only if the orders were placed much in advance and the goods had already been shipped from the country of origin. "It takes months for imported shipments from Europe to arrive. In this case, if NDDB has obtained the Commerce Ministry's licence to import only 10 days back and if the imported powder is to arrive in 10-15 days, it means the deal had already been signed, for which it has not got post facto approval," he noted.

In its release, NDDB had said that it had actually applied for import of powder in March 2003, but the matter was not pursued further because all domestic sourcing options were sought to be exhausted before resorting to imports. "If they felt that there was an impending shortage then, why did Mother Dairy stop buying one LKPD of fresh milk from us and 40,000 litres per day from the Bihar Federation from January this year? Besides, we were also annually supplying 18,000 tonnes of powder and white butter, which, too, was discontinued. It is their poor inventory management that has caused the milk shortage in Delhi, which is now being covered up through import of powder," a GCMMF official said.

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