Milma MD Asif K Yusuf told South First that this is despite communication between the two dairy cooperatives and the state governments.
An image of a Nandini outlet. (Supplied)
The Kerala Co-operative Milk Marketing Federation (KCMMF), known by the brand Milma, has termed as “unethical” the tendency of some state milk marketing federations to aggressively enter markets outside their respective states.
Interestingly, its target appears to be Nandini, the Karnataka brand that is locked in a tussle with Gujarat-based Amul on its home turf.
Criticising the Karnataka Milk Marketing Federation for opening outlets in parts of Kerala to sell its Nandini brand of milk and other products, Milma said this was a total breach of the cooperative spirit, based on which the country’s dairy sector has been organised for the benefit of millions of dairy farmers.
Speaking to South First, Milma Managing Director (MD) Asif K Yusuf said despite communication between the two diary cooperatives as well as the state governments, the situation has not changed.
“A few months ago, the government secretary of Kerala communicated the issue to their counterpart in Karnataka. The main issue here is that liquid milk and fresh products are usually not sold across state borders, but Nandini has been selling these products in Kerala for a few months now,” said Yusuf.
However, according to Yusuf, Milma does not have any disagreements with Nandini over the sale of Nandini products in Kerala, but the opposition is only on the sale of fresh products — like milk, curd, and buttermilk — in the state.
“To my knowledge, the Karnataka government has not responded to the letter by the Kerala government secretary, but in communication with the chairman of Milma over the phone, it said it would not sell fresh products in Kerala. But Nandini is selling milk in many places in the Ernakulam and Malappuram districts of the state even now,” said Yusuf.
Yusuf opined that Milma came public on the issue after the Nandini and Amul issue triggered a debate on the sale of fresh products.
“Of late, there has been a growing tendency on the part of some of the milk-marketing federations to market their staple products outside their respective states. This grossly violates the federal principles and cooperative spirit based on which the country’s dairy cooperative movement was built and nurtured by pioneers like Tribhuvandas Patel and Dr Verghese Kurien,” Milma Chairman KS Mani said in a statement.
He noted that the move of Amul to promote its staple products in Karnataka was met with strong resistance from stakeholders in that state.
“But the Karnataka Milk Marketing Federation recently opened its outlets in parts of Kerala to sell its Nandini brand of milk and other products. How could this be justified?” asked Mani.
“Whoever does this, it is a highly unethical practice that defeats the very purpose of India’s dairy movement and harms the interests of the farmers,” he added.
This trend would only lead to unhealthy competition among states, which needed to be reined in with the Union and state governments coming together to evolve a consensus, Mani explained.
As per the prevailing agreement and courteous business relations existing among milk cooperatives, cross-border marketing of liquid milk is avoided as it amounts to the encroachment of the sale area of the respective state, he said.
Such practices from any side will jeopardise the spirit of cooperative principles that have been nurtured for a long time by mutual consent and goodwill, Mani said.
The tendency to enter the markets outside one’s domain by opening sales outlets or roping in franchisees should be avoided, he added
Initially, they sell only value-added products, then start selling liquid milk also and subsequently begin shop-to-shop distribution of milk, he said.
Eventually, they will seek to capture markets outside their respective area, taking advantage of the state-to-state variations in price and production cost, the Milma chairman claimed.
Though the input cost in the dairy sector in Kerala is much higher compared to other states, Milma passes on 83 percent of its turnover to dairy farmers through the cooperative societies in its network.
Also, the bulk of Milma’s surplus is given to the farmers as an additional incentive on milk price and subsidy on cattle feed as the well-being of the dairy farmers is its prime concern.
Considering these stark realities, it is in the best interest of dairy co-operative federations of various states that they refrain from plans to open sales outlets or make franchisee arrangements to sell liquid milk and other staple products outside the respective state, Mani said.
Speaking to South First, Aby Ipe, a leader of Karshaka Congress, a farmer’s association affiliated with the Congress, said 80 percent of the milk produced in Kerala was sold through Milma.
He said it would be ideal for the betterment of dairy farmers in the state to regulate the sale of milk through private players and by milk cooperatives like Nandini operating outside the state.
“In recent years, numerous private players have been selling milk in the state. But only Milma provides incentives to farmers in Kerala. Hence, the production cost of one litre of milk in Kerala is much higher than those transported from outside the state. There are reports of adulteration in milk sold by private firms. Thus, it is absolutely necessary to strengthen Milma and regulate the private players,” he said.
Ipe also criticised the government for signing contracts with private groups instead of strengthening the local milk cooperatives in the state.
He cited the example of the state government’s contract with Muralya Dairy Products, a part of the UAE-based SFC Group.
The government, as part of this deal, allocated 4.6 acres of land to the company to set up a ₹100-crore mega dairy project and logistics unit in the industrial area of the Kerala State Industrial Development Corporation in Angamaly.
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