Annual Reports are usually known for their ‘non readability’ – both in terms of ‘content’ and ‘production’. Organizations typically tend to pack a lot of material which is of little relevance to the lay reader: the text is usually uninspiring ,interspersed as it is, with mug shots of political leaders pressing a button, or cutting a ribbon. The production is indifferent, and even when organizations use glossy paper, little attention is paid to the organization of the text, font size, readability and ease of going through different chapters. Not so with the NDDB report for 08-09 which your columnist received a few days ago. Like with most things which NDDB does, the report is a pleasure to look at and with the exception of statement of accounts, is eminently readable. Your columnist read through most of it in a recent flight from Kolkata to New Delhi, and found it better than the ‘in-flight’ reading material provided by the airline !
Lets start with the aesthetics of the cover page. Adopted from a mural at Bund Palace, Rajasthan, it has Kamdhenu (the mythic cow which gives abundant milk) and her calf, decked with peacock feathers, tassels, jewels and bells ) in a glen with a wide range of flowers and foliage, and a water body in the vicinity with fish, swans, cranes ,ducks ,water lilies and lotus. The calf looks with absolute bliss at the full udder of the cow, while she is happy licking the calf with all her maternal instinct. Here is nature at peace with herself, and one can view the cover page itself for quite a while and feel a sense of serenity. Full marks to the creative consultants for choosing this cover !
Now for the report. The Indian milk production scenario is placed in the global context. We continue to be the world’s largest milk producing nation, and with an anticipated production of 110 million tonnes of milk in the year under review, it amounts to nearly 16% of the global milk production. But what is interesting to note is that even though the global milk production increased marginally by 1.7%, the prices of butter milk and SMP (skimmed milk powder) in the international market virtually crashed. SMP fell from $3500 per tonne to $1900 per tonne, while in the case of butter milk the decline was even steeper- it came crashing from $3950 per tonne to $1850 per tonne. By January 2009,prices of dairy commodities in Europe had fell below intervention levels, and export subsidies were announced, which ushered in a semblance of price stability to the commodity.
Fortunately for the dairy farmer in India, domestic prices of milk and milk products continued to showed an increase between 5 to 6 percent for the producers and consumers. The prices of ghee rose even sharper, while prices of SMP remained more or less stable. Thanks to the ever increasing demand for milk and milk products on account of robust economic growth in most parts of the country, the NDDB has drawn up an ambitious National Dairy Plan to met a projected demand of about 180 million tonnes of milk by 2021-22,(reference period) with the share of organized sector in milk rising from current levels of 30 percent to about 65% during this time. The co-op sector would continue to have at least 50% share in the organized milk market in the country, though one does notice a shift in the NDDBs earlier focus on co-operatives to producer companies, new generation co-operatives and co-op type organizations. Whether this dilution of the ‘Kurien Mandate’ augurs well for both the dairying and the co-op sectors can be determined only after a decade or so – for the present, your columnist feels that if NDDB also chooses the ‘softer option’ of working with ‘co -op’ like organizations, the prognosis is not good at all. It is true that it takes longer to organize co-operatives, and if the main objective is milk procurement, then the time and effort required in organizing co-operatives is perhaps not worth it. However, let us examine the counterfactual. Producer companies can be taken over by the ‘corporates’ in a leveraged buyout option which is not possible in the case of a producer co-operative. Therefore even though co-operatives are not the flavour of the season, and it was the dogmatic pursuit of the ‘co-operatives – in- command’ syndrome that saw the exit of Kurien from Anand, your columnist feels that NDDB should not dilute its focus on co-ops. Wherever required, existing co-operatives may take up certain milk sheds as project areas and foster co-op education and training and make farmers self reliant. Having said all this , a caveat is in order. This columnist feels that while the co-op form of member based, member centered and democratically controlled enterprises is the best, producer companies are a better bet than Investor Owned Firms or corporates. As Dr Tolia is so fond of saying , ‘let not good be an enemy of the best !’
The Report goes on to inform the reader about the steps taken by NDDB to promote smart cards and micro finance in several milk sheds, new initiatives in product and process development to meet the demands for healthier food options. As the report says ‘ an increasing awareness about health foods has created vast business opportunities for business in healthy, low fat and fortified foods and beverages. work on a low sugar fibre based probiotic drink, probiotic whey beverages, low fat paneer and curcumin fortified butter is in progress. Enhancing productivity through scientific breeding, artificial insemination services, feeding, disease control and health care services has always been an integral part of the NDDBs action strategy : what is new is the focus on indigenous breed development through pedigree selection . The two local breeds that have been chosen include the Rathi and Kankrej in Rajasthan and Gujarat respectively. This is a very positive development because the ability of the indigenous cattle to survive in difficult conditions and challenged pasture lands is significantly higher. These breeds would also be much cheaper than the Jerseys and Holsteins, and therefore more amenable for the marginal and small farmers.