Lakshmana Venkat Kuchi
Business strategy wise Gujarat based milk cooperative that owns the Amul brand is perhaps doing the correct thing by expanding into virgin territories, like now in Tamil Nadu, but in doing so seems to be landing the BJP, the party that heads the central government, in a hot political waters.
It may be recalled that just a few weeks ago, Amul had to beat a hasty retreat in neighbouring Karnataka where its expansionist practices turned into a potently powerful political issue with stiff opposition from the then opposition parties, the people in general and the farming community in particular. The ruling dispensation in Karnataka was seen as colluding with an outside company at the cost of the local brand Nandini and leading to its detriment, and it found itself unable to pacify angry Kannadigas.
Strong cooperative movement in the milk arena in Karnataka meant hundreds of thousands of farmers were associated with milk business, and they feared disruption in their livelihood if the Gujarat based company replaced or took over Nandini as per indication available. In fact, the more the company denied the talk of a merger of Amul and Nandini, the more the people believed it to be true and some, if not all, farmers decided to punish the BJP for allowing or bringing Amul into the state.
The then opposition Congress took up the issue of Nandini in a big way and scored huge brownie points and was seen as the saviour of the local milk brand that also came to be associated with Kannada pride. In the heat and dust of elections, Amul beat a retreat and announced that it was holding up its plans of going big in Karnataka.
But barely has this attempt bombed, Amul has launched another predatory business move, this time in Tamil Nadu, which has now strongly been opposed by state Chief Minister MK Stalin.
Now, Amul has used its multi-state cooperative licence to install chilling centres and a processing plant in Krishnagiri district and was planning to procure milk through farmer producer organisations and self-help groups in and around Krishnagiri, Dharmapuri, Vellore, Ranipet, Tirupathur, Kancheepuram and Thiruvallur districts. Taking serious exception to this, Tamil Nadu Chief Minister MK Stalin sought immediate intervention of the central government to ensure Amul backtracked on its recent business moves in the state. Making this demand in a letter to Union Minister for Cooperatives, Amit Shah, Stalin said it has been the norm in India to let cooperatives thrive without infringing on each other’s milk-shed area.
“Such cross-procurement therefore goes against the spirit of Operation White Flood and will exacerbate problems for the consumers given the milk shortage in the country, “Stalin said.
“This act of Amul infringes on Aavin’s milk-shed area, which has been nurtured in true cooperative spirit over decades. This will create unhealthy competition between cooperatives engaged in procuring and marketing milk and milk products,” Stalin said urging the Union Minister to intervene and direct Amul to immediately stop its procurement activities in Aavin’s milk-shed area in Tamil Nadu.
On the political level, the Amul move appears like one that could adversely affect the BJP’s attempts to make deeper inroads into Tamil Nadu, a state where it has found the going very tough so far. In Tamil Nadu, where the BJP already is seen with suspicion over its stand on language, culture it is perceived as an aggressive North Indian entity trying to subjugate the state. Given this backdrop, Amul’s action of procuring milk from Tamil Nadu’s milk-shed area can be misunderstood as an attempt to weaken state-owned Tamilian brand and trigger another wave of Tamil pride.
Its bid to increase milk procurement in the state and set up chilling plants for its business expansion is not being seen kindly. Stalin has, in an urgent letter to
Union Minister for Cooperatives, Amit Shah, painted a grim picture and urged him to direct Amul to halt its operations in the state. Stalin said TN dairy cooperatives were functioning since 1981 and benefitted milk producers and consumers alike.
Close to 10,000 milk producers cooperative societies are working in villages across the state. Aavin procures 35 lakh litres of milk per day from about 4.5 lakh members.
“To increase and sustain milk production in Tamil Nadu, Aavin also provides various inputs such as cattle feed, fodder, mineral mixture, animal healthcare and breeding services for animals of milk producers. In addition, it ensures the supply of quality milk and milk products to consumers at one of the lowest prices in our country. Thus, Aavin plays a vital role in improving the livelihood of rural milk producers and meeting the nutritional requirements of consumers,” he said justifying his demand for reigning in the Gujarat-based milk brand in Tamil Nadu.
Regional cooperatives have been the bedrock of dairy development in the states and they are better placed to engage and nurture producers and to cushion consumers from arbitrary price hikes, Stalin said.
