Over 200 dairy cooperative veterans have written to the Union government and concerned ministries to express their opposition to potential amendments to the National Dairy Development Board (NDDB) that could privatize the organization.
The Government of India (GoI) asked public feedback on the proposed NDDB Amendment Act in a memo dated January 18, 2022. The proposed modifications center on undermining the dairy sector's cooperative approach, appointing private industry experts to the NDDB's board of directors, and enabling the NDDB to invest in non-cooperatives.
The letter, signed by veterans comprising retired MDs of Amul, Nandini, Milma, unions and EA to Dr. Varghese Kurien, former director of IRMA, warns that these revisions will pave the way for the privatization of NDDB and eventually, its subsidiary firms such as Mother Dairy.
The NDDB was established in 1965 with the goal of replicating "the successful Anand Pattern of Dairy Cooperatives across the country. The Anand cooperative, also known as Amul, and NDDB focused on "the cooperative strategy," which offered "farmer members ownership over not just the firm but also the brand name, and helped eliminate the middleman."
This strategy was vitally critical for NDDB's Operation Flood (OF) I, II, and III, which were carried out over a 26-year period (1970-1996) and "helped India grow its milk production from 20 MMT in 1970 to nearly 200 MMT now, leading to increased nutrition through increased milk per capita availability from 103gm in 1970 to nearly 400gm now."
The letter warns the government that the proposed amendments could turn the Indian dairy industry towards a private sector model, similar to Australia and the US, where limited people benefit from the industry's growth.
"The proposed NDDB Amendment Act 2021 would be akin, by weakening its core 'cooperative approach' (Clause 4 of the Amendment) and opening it up to private sector investment as well as enabling a private dairy industry 'expert' to be on the NDDB board of directors (Clause 2). It is diametrically opposed to all that NDDB stands for, all of its principles and philosophy. It's like telling a Yoga guru to do Zumba. There is no dearth of funders for the private dairy start-ups. There is only one for the dairy cooperatives- NDDB," the letter says.
It also highlights the ownership in NDDB subsidiaries such as Mother Dairy (Rs.10000 crore), IDMC (Rs.710 crore), Indian Immunologicals Limited (Rs.906 crore), and NDDB Dairy Services (Rs.5252 crore total turnover of subsidiary Milk Producer Companies) are at stake. These subsidiaries were built with taxpayer funds and cash generated in the name of farmers, and if privatized, they would be taken away from their legitimate owners, the farmers.
While emphasizing the risks of the proposed amendments, the letter also addresses the issue of corruption in the NDDB and makes many recommendations for its reform. For instance, it highlights the politicization of cooperatives, which may be avoided by enforcing the 'One Person, One Vote' rule, which prohibits elected MLAs/MPs/Councilors from taking over the board. The letter also suggests that the MD of NDDB shouldn't be an IAS but a professional from the cooperative dairy sector with a vision and inclination for this position.
Furthermore, the letter calls for the strengthening of India's milk business through Bulk Milk Chillers (BMCs), "where investment is now needed and there is also a large employment opportunity." Furthermore, the sector may use block chain technology to transform cooperative societies into decentralized autonomous organizations (DAOs), enhancing transaction transparency and raw milk traceability.
