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Explore Export Potential:BEWARE UNJUST MILK PRACTICES,Dr. Vinod Mehta,3 October 2007 Print E-mail

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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