Banas Dairy a big success story; honcho Bipin Patel explains how it did it

By: | Published: September 27, 2016 6:08 AM

In the last four fiscal years (FY13 to FY16), the turnover of Banaskantha District Cooperative Milk Producers’ Union aka Banas Dairy has jumped from R3,551 crore to R6,112 crore (a growth of 73%).

In the last four fiscal years (FY13 to FY16), the turnover of Banaskantha District Cooperative Milk Producers’ Union aka Banas Dairy has jumped from R3,551 crore to R6,112 crore (a growth of 73%) with corresponding increase in volume of milk procurement from dairy farmers. Being the biggest contributor (25%) to the total quantity of milk procured by Gujarat Cooperative Milk Marketing Federation (GCMMF) popularly known as Amul, Banas anticipates further acceleration in milk procurement in years to come. Bipin Patel, managing director, Banas Dairy spoke to Sandip Das on reasons behind success of the biggest dairy in the country. Excerpts:

What are key factors responsible for so many people engaged in the dairy business?

Banaskantha district gets around 600 millimetre of rainfall annually against the national average of around 900 mm rains. Normally, the actual rainfall is often below average. Besides the district is located next to Kutch desert. In such conditions, people started getting engaged in dairy farming. Besides, we have been consistently giving remunerative prices to dairy farmers. We also help them by providing support through supplying cattle feed, veterinary services, providing training to the farmers for running the dairy business professionally, etc.
There are farmers who have two cows or buffalos at present, are now aiming at keeping more cattle. Even landless people are also keeping cattle. There is minimal presence of industries in this district. Earlier, agriculture used to be key livelihood option. Now dairy has become main business for the farmers, as it provides assured income. Moreover, one does not need to go out of the village to sell their produce. Women presence is also very high in this business.

How do you anticipate the growth of this dairy in the next decade or so?

We are into the milk production business. As people are getting more health conscious, the demand for dairy products is rising in the domestic market. There are lot of untapped market. Amul has not penetrated into many areas. We foresee growth in dairy business would continue for another 10-15 years. We do not anticipate any slowdown. The cooperatives are three-tier structures. In order to get better results, everybody has to be efficient including the farmers, village-level societies, district unions, etc. Efficiency comes when there is ownership of the leaders. Unlike other states, there is no bureaucracy in our system and people working in cooperatives have longer tenure. We are successful because of the transparent transactions from procurement to selling of the milk products. Loyalty of the farmers to the federations is enormous. It took more than 40 years to build this loyalty.
How do farmers or those who own cattle benefit from selling milk?

We get money from the market after selling milk. We give back 86 paise to farmers from R1 earned from the selling dairy products. In the remaining 14 paise, we are managing everything — processing, packaging, quality, staff salaries, etc. We need to be extremely efficient to survive in this business. Dairy has impacted people especially in the education sector. Farmers are giving education to their children. At low risk and low cost, smallholder dairy production helping economic activity in the district. Dairying can reduce poverty and improve livelihoods because of its high returns to land and labour, and its many forward and backward linkages. The trade of milk from rural areas to cities is an excellent tool for transferring capital from richer cities to poorer rural areas.

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