Bihars milk trail to NCR

Written by Sandip Das | Updated: Nov 19 2012, 02:15am hrs
With Sudha brand of milk and dairy products from Bihars milk cooperative joining the list of state federations supplying milk to the NCR, the competition gets intense in the Delhi region milk market

Earlier this month in a packed press meet, Bihar State Milk Co-operative Federation (COMFED) announced its entry into the ever-expanding milk distribution market in the national capital region (NCR), with the introduction of its products under the Sudha brand.

With an estimated daily consumption of 70 lakh litres of milk in the Delhi region, Sudha is the latest entrant to the market, which is dominated by Amul (Gujarat Cooperative Milk Marketing Federation), the country's largest food product marketing organisation, Mother Dairy (owned by National Dairy Development Board) and private players. The consumption in Delhi region is expected to touch 100 lakh litres daily by 2020.

However, it would be sometime before Sudha makes its presence felt in NCR. It shows that competition among 20-odd state milk marketing federations is hotting up, which would be beneficial for the consumers, an official with the department of dairy and animal husbandry told FE.

The key onus of this competition goes to Amul, which has managed to emerge as the biggest packaged milk supplier in the country during the past one decade. Milk distribution is a volume business and we try to expand our market through an aggressive marketing network, an official with Gujarat Cooperative Milk Marketing Federation (GCMMF) said. Thanks to the Amul model, India has emerged as the largest milk producer in the world. More than 15 million farmers or milk producers sell their produce to 1.44 lakh dairy cooperative societies across the country. Then the milk is processed in 177 district cooperative unions and marketed by 22 state marketing federations to the consumers.

India continues to be the largest milk producing nation, with production of 122 million tonnes in 2011-12. This is about 16% of the world's milk production. We are expecting 127 mt production of milk this year, which is likely to reach 180 mt by 2020, PG Bhatol, chairman, GCMMF, recently stated.

The strategic move to enter the Delhi market by Sudha comes after its success in increasing milk procurement and marketing in Bihar, Jharkhand and other eastern states. Although Sudha's daily milk procurement volume of around 1.4 million litres is nowhere near Amul's 10.3 million litres, it shows that state cooperatives are coming of age and ready for competition. With an organisation created by a small group of around a thousand dairy cooperatives with guidance from India's milkman, late Varghese Kurien, close to three decades back, the Bihar State Milk Co-operative Federation (COMFED) has come a long way.

Comfed, with its Sudha brand of milk and milk products, has expanded its presence in eastern India and recently the R14,00-crore turnover cooperative, built on the 'Anand' pattern, made its debut in the National Capital Region (NCR) for selling milk and milk products. It's not the first time we will be selling milk in the national capital region; we have been supplying milk to Amul and other brands in the last few years, said Harjot Kaur, managing director, Bihar State Milk Co-operative Federation (Comfed).

With close to 14 lakh litres of daily milk procurement in Bihar, Comfed has linked more than six lakh farmers in its network and is rising steadily. Comfed has close to 12,000 village-level dairy cooperative societies to assist in milk procurement.

Comfed has six affiliated milk unions, including Rajendra Prasad Dugdh Utpadak Sahkari Sangh , Barauni, Vaishal-Patliputra Dugdh Utpadak Sahkari Sangh Patna, Mithila Dugdh Utpadak Sahkari Sangh Samastipur and Tirhut Dugdh Utpadak Sahkari Sangh, Muzaffarpur. All the milk unions have democratically elected boards which gives credibility to Comfed's quest for eventually reaching out to farmers across the state of Bihar and even outside, say officials.

The key reason behind the phenomenal growth of Sudha, officials claim, has been the high remuneration to farmers. Out of every rupee earned from selling milk, 80 paise goes back to farmers and this shows that we have managed to eliminate intermediaries from the distribution system, noted Kaur.

A Bihar agriculture department official said in the initial years of its formation, Comfed was focused on creating dairy cooperative societies at the village level for creating grassroots infrastructure for milk collection and distribution. The procurement and sale of milk and milk products moved at a slow pace, with only about a lakh litres of milk procured and sold in 1992-93. With the launch of milk products and setting up of milk processing units, the procurement rose sharply during the past five years so, said the official.

Of the total daily milk procurement of 1.4 million litres, the federation distributes close to a million litres in Bihar and Jharkhand. Another two lakh litres is used for milk products. We have been supplying close to two lakh litres a day for the Delhi region to other federations since the past few years. Now we have started to sell milk in Delhi region through the Sudha brand, said Kaur.

It is estimated that Amul sells about 2-2.5 million litres daily, while Mother Dairy promoted by National Dairy Development Board distributes about 1.6 million litres. The rest is provided for by private players.

The opportunities are immense and the entry of Sudha is timely, Kaur noted. Pollution free environment, green fodder in the Gangetic belt and availability of pure water for the milch animals and immediate chilling and processing of milk have ensured the quality of Sudha milk, she claimed.

Over the span of four decades, India has transformed from a country of acute milk shortage to the worlds leading milk producer, with production exceeding 127 million tonnes in 2011-12. This success is mainly because of the government-supported initiative, known as Operation Flood (19701996), and its focus on dairy development activities. Senior animal husbandry department officials admit that Amul cooperative is run by farmers and professionally qualified managers, which is the reason for its success. In many states, the cooperatives are managed by civil servants and function more as government bodies and are weak representatives of farmers. By this comparison, the success of Sudha is noteworthy and worth emulating by other state cooperatives.

Meanwhile, after launching of its milk and milk products under brand Sudha in the national capital region, Comfed is planning to form a separate cooperative to market fruits and vegetables as well, on the lines of the Safal model adopted by Mother Dairy in the NCR.

Interview: Harjot Kaur,

Managing Director, Bihar State Milk Co-operative Federation (Comfed)

We want to replicate the success of milk in fruits and vegetables

What is the idea behind Sudha's debut in the NCR

We have been supplying milk to NCR since the past few years, but that was to Amul and other brands. For the first time we have started to sell milk and milk products through our own Sudha brand. After meeting the requirement for Bihar, Jharkhand and the east Indian market, we are left with surplus of about two lakh litres of milk daily. We have hired a private milk plant in Ghaziabad for maintaining our supplies to the Delhi region.

Sudha brand grew even during the time when Bihar's economy was in a bad shape. What are the key reasons for the brand's success

Sudha brand grew even during the time when Bihar's economy was not doing well. All our 12,000 odd dairy cooperative societies (DACs) are elected bodies and farmers have trusted us all along as we have been paying better remuneration to farmers, which is essentially leading to rise in procurement annually. Disputes in DACs are dealt in a democratic manner without any political interference. We are the major milk supplier to Bihar and Jharkhand.

Are you planning to enter marketing of fruits and vegetables in Bihar after establishing yourself in the milk marketing arena

We are toying with the idea and we will follow the Mother Dairy model for selling fruits and vegetables in Bihar. We will be setting up a separate entity for it. With the abundance of vegetables and fruits grown in the Gangetic plain, the move would help farmers realise better returns for their produce.

The focus on creating a separate unit for fruits and vegetables would be to ensure that intermediaries are abolished so that farmers get major share of the consumer price.