Economic Highlights
New Delhi, 3 October 2007
Explore Export Potential
BEWARE UNJUST MILK PRACTICES
By Dr. Vinod Mehta
(Former Director, Research, ICSSR)
A decade ago, India
overtook the U.S.
as the world's largest milk producer and will retain this position in the
coming years. Thanks to the Operation
Flood Programme. From producing only 17 million tonnes of milk in 1950-51, the
country reached 97 million tonnes in 2005-2006 and is estimated to reach 100
million tonnes for the year 2006-07. More. The projections of milk production
is 240 million tonnes in 2020.
However, behind these dry statistics
lies the fact that the increased milk production has also brought about a social
change in the rural sector. By way of diary cooperatives which have put
reasonable earnings in the hands of the poorest of the families owning only one
or two cattle. While half of the milk is handled by the farmers’ cooperative
societies set up under the National Milk Grid of the National Dairy Development
Board (NDDB), the private and cooperative sectors produce the rest.
There are more than 77,500 Diary
Cooperative Societies organized in more than 170 milk sheds involving over 10
million farmer members. A major feature of our white revolution is that the
Government has ensured that a large percentage of the total milk produced in
the country is made available to the general public as fresh liquid milk.
It
is, however, feared that with the further opening of the agricultural sector
under the WTO agreement all these achievements may be in danger if the Government
does not take appropriate measures to protect the consumer as well as the
farmer from the “unjust competition” and “unjust practices” of the milk
exporting countries.
The
multi-national corporations (MNCs) already operating in India in the
fast moving consumer goods sector or the MNCs thinking of entering the country
may change the rules of the game and the gains made in the rural sector in the
form of social change may be lost.
Nonetheless, if one goes by the experience of the past four
years, these fears appear to be unfounded. The Indian dairy industry need not
worry about the MNCs, but should concentrate on capturing a slice of the
international market especially for milk-based products like cheese, dahi, ice
cream etc., even though it may appear a daunting task today.
Though
India
is the largest producer of milk in the world but it is not the largest exporter
of milk. According to the data available
for the year 2001, the country produced 80.5 million tonnes of milk (the
projection for 2002 is 82 million tonnes), followed by USA – 75 million tonnes,
Russia –33 million tonnes, Germany –
28 million tonnes, France – 25 million tonnes, New Zealand – 15 million tonnes,
Australia – 11 million tonnes, China – 10 million tonnes and Japan – 8.3
million tonnes.
Since
milk is a perishable item it is converted into milk powder to increase its
shelf life. The milk powder is then
reconverted into liquid milk and some chemicals added to prolong its shelf
life. Apart from the conversion of fresh
liquid milk into powder, liquid milk is also converted into various diary
products like butter, cheese, butter oil, ghee,
ice cream, flavoured milk etc. All these are value added products which fetch
high prices for the manufacturer of these products but not for the
producers. This is the normal practice
in the developed countries.
With
the opening of the agricultural sector, the MNCs may enter the dairy sector in
a big way in the coming years. As it stands, two of them, which are already in India, are
trying to get a foothold in the Indian dairy market. The cooperative milk
sector led by the Gujarat Cooperative Milk Marketing Federation (GCMMF) has
taken the competition seriously and is pushing ahead in a big way.
However, to ensure a level playing field, the MNCs
should also be asked to ensure the supply of fresh liquid milk to the Indian
consumers before they can market the reconstituted milk or milk products. The proportion
of fresh liquid milk to be marketed by these corporations must be clearly
defined. Again, while marketing fresh
milk, they must be asked to clearly state on the carton or pouch whether the
milk is fresh milk or reconstituted milk.
In a situation where the MNCs are likely to enter the milk
sector, it is essential to protect
the interests of the consumers. It is
common knowledge that most of these companies resort to various kind of
undesirable practices to sell their products.
Many a time they resort to a play of words to mislead the public.
For instance, the reconstituted milk in tetra packs is
either described as pure milk or natural milk, which clearly means that it is
not fresh liquid milk. Since people
cannot distinguish between fresh liquid milk and reconstituted milk they buy
the reconstituted milk as if it is fresh milk.
Again the milk powder they use to reconstitute the milk comes from
various sources.
The time is ripe to put in place strict quality control
norms for the sale of milk and milk products, both for the domestic and the
international market. It is, thus important that, as a first step, the
Government makes it mandatory that every packet of milk and milk product should
carry the exact information whether a particular product is made from fresh
milk or reconstituted milk etc.
If reconstituted milk has been made from imported milk
powder then the information regarding the source and origin of milk powder must
be printed on the carton. Similarly, if packed curd, paneer, cheese, etc. are being made from reconstituted milk the
people have a right to know that this is so.
If any preservatives and chemicals have been added that should also
mentioned on the carton.
After
having met the liquid milk needs of the domestic consumer, the milk producers
are now going in for value added products like butter, cheese, curd, ice cream
in a big way. It was feared that such a move would lead to an increase in the
prices of milk and milk products, but surprisingly, the prices of milk and milk
products have remained relatively stable in the past three years. This is to the credit of our dairy
cooperatives.
Now
the cooperative dairy sector as well as the domestic private dairy sector
should slowly look at the foreign markets where the prices are quite
remunerative for butter, cheese, ice-cream etc. Sometime back the GCMMF had
taken a lead by exporting large quantities of liquid milk to Singapore every
day.
It
is now eyeing the milk markets of Thailand,
Malaysia and Indonesia. The
day may not be far when India
may export milk to China
also. But all this depends upon the quantity of fresh milk we can spare after
meeting our domestic demand. They should also enter the international market
for dairy products.
It
should also be understood that in most of the countries the farmers get large
amounts of subsidies to maintain the production of milk at a certain
level. This factor should be taken into
account while allowing foreign companies to sell milk and milk products in India by
levying appropriate customs duties.
With
the project patent regime coming into force from January 2005 all dairy processes and products have become patentable. We should
move fast to patent our processes
and products to ensure we are not edged out of our own market. For instance, India has perfected the processes of producing milk powder and cheese from
buffalo’s milk. This needs to be patented immediately if not done so far. This
is important if we have to develop and sustain international markets for our
milk and milk products.
In
the new WTO regime, India
must keep its edge over milk production and should aim to emerge as the largest
exporters of milk and milk products. For this we need not rear more cattle but
increase the milk yield through better feed to cattle and by improving the
pedigree of cattle stock. Also, we must enforce stringent quality norms that
conform to international standards for the marketing of milk and milk products,
both in India
and abroad. ---- INFA
(Copyright India News and Feature Alliance)
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