Flowing with times

The government moots a National Dairy Plan, which will help boost milk production by increasing the share of organised dairy sector over 15 years

Given the spurt in demand for milk and milk products in the domestic market and the flourishing export opportunities, the government is now planning a long-term National Dairy Plan NDP. In an effort to increase the production of milk and milk products, the NDP will aim at boosting the share of organised dairy sector8212;cooperative and private8212;from the current 30 per cent to 70 per cent over a period of 15 years.

With the demand for milk and milk products in the country projected to go up from the current 100 million tonnes to 180 million tonnes by 2022, the NDP proposes substantial investments to increase productivity and improve the infrastructure to help procure, process, market and assure high quality products.

To be implemented through a consortium of NABARD, National Cooperative Development Corporation, and National Dairy Development Board, the plan envisages an investment of Rs 20,000 crore, with Rs 15,000 crore coming from NABARD and the remaining amount from the central government.

To avail of the funds from the corpus, the organised dairy sector will have to meet strict guidelines related to autonomy, good governance, professionalism and transparency in milk procurement system as stipulated by the consortium. The NDP estimates that the consortium will offer loans at 12 per cent per annum.

To promote the organised sector, the NDP proposes a major policy shift in terms of limiting its area of operation and inclusion of new players under the consortium. It will limit its operation to 323 districts which have a good potential for milk production, leaving the remaining districts to be served by the central government departments. In addition to the traditional dairy cooperatives, self-help groups and dairy federations, the NDP has included the 8220;new generation cooperatives8221; and companies registered under the Companies Act as being eligible to draw credit from the funds, implying that they can draw credit at the same rates as traditional cooperatives.

However, these issues were seriously deliberated upon during a recent meeting chaired by Agriculture and Food Minister Sharad Pawar, which was attended by officials of the NABARD, NDDB, Department of Animal Husbandry and Dairying, and representatives from dairy federations, industry and state governments.

While the NDDB, which prepared the Plan, said that the provisions were important to promote the organised sector, representatives of dairy federations objected to the inclusion of new generation cooperatives producer companies under its umbrella, saying that these should not be eligible for the government funds earmarked for cooperatives. However, NDDB is learnt to have argued for inclusion of new generation companies to foster competition.

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Objections were also raised about the viability of 12 per cent interest rate for loans under NDP, to which sources reveal the agriculture minister has assured help.

Another meeting has now been scheduled by the agriculture minister for July to give a final shape to the NDP.