Thursday, May 24, 2007

White Revolution

My father is into dairy industry.He rendered his services to Andhra Pradesh Dairy Development Co-operative Federation (APDDCF) for nearly 30 years and he is now working with a different dairy.He worked/working on various aspects of dairy industry like organizing co-operatives of Milk Producers at village and district levels,providing essential inputs to enhance milk production, feed and fodder production, cross breeding programs, veterinary aid, development programs to provide effective management skills to the milk producers to help them manage their own Co-operatives,monitoring dairy infrastructure,quality and on-time delivery of milk.I always admire his job profile much because of the way co-operative unions talk about him and his dedicated work inspite of all red-tapism.He is a strong supporter of the dairy cooperative movement, and says that helping dairy farmers gives immense job satisfaction.

90% of the human resources in IT industry work effectively with tea and coffee breaks.Being a part of this industry I am thankful to my father and Dairy industry in general.

My direct experiences with my father's day-to-day professional activities,disgraceful resignation of Mr.Verghese Kurien,recent controversy on state government take the management of eight co-operative dairies in the State ignoring the liberal co-operatives law - Mutually Aided Co-operative Societies Act 1995 (Macs Act) stirred my interest to explore this beautiful Win/Win business model of co-operatives.

During 1960s India was one of the largest dairy importing, in the world.India's policy makers took stock of the situation and established NDDB (The National Dairy Development Board) with the mission of making dairying a means to a better future for millions of grassroots milk producers and also embarked upon Operation Flood, an initiative to create white flood of milk through out India.Here I should not forget to acknowledge Mr.Verghese Kurien (Milkman of India).He engineered the WhiteRevolution in India.The milk cooperatives under Operation Flood follow the Anand Pattern of co-operatives, which was pioneered by Dr Kurien when he was General Manager of the Kaira District Cooperative Milk Producers' Union Limited, Anand.Subsequently many state dairy development projects had been undertaken.

The business model adopted in these programmes is co-operative system.In this model the business is owned, operated, and controlled by the dairy farmers who help themselves.The milk packets that we consume daily come from the udders of the animals(buffalows) owned by these farmers. Members finance the cooperative and share in profits it earns in proportion to the volume of milk they market through the cooperative.Nearly 2-3 crores of dairy farmers belong to around 1 Lakh dairy co-operatives.These co-operatives sell their product to one of the hundreds of co-operative unions which, in turn ,are supported by co-operative milk marketing federations.This is known as three-tier co-operative structure ((1)milk societies (2)milk unions (3)milk federations).Unlike in a company where one man has as many votes as the number of shares he holds,in a cooperative organisation one man has only one vote.But the new marketing scheme proposed by the NDDB appears to provide that the newly set up marketing companies (`subsidiary' companies that come under NDDB's marketing organisation registered under the Companies Act as permitted by the NDDB Act)will issue to the dairy cooperatives 49 per cent of their shares in return for the surrender of the sole marketing rights for their products in perpetuity. This creates a potentially dangerous risk to the cooperatives and constitutes a departure from fundamental 'cooperative principles'.This is one of the resons for the renouncement of Verghese Kurien.If implemented properly by-passing middlemen co-operative system is win/win situation for producer and consumer.The new model may also succeed if it gives importance to this point.

In 1991 changes in the Milk and Milk Products Order (MMPO) liberalized the dairy industry.Many private sector dairy plants were set up.Now , big conglomerates are into the dairy industry.Thus the dairy industry shined brighter and brighter starting from deficits.States have developed popular dairy brands such as Amul (from Gujarat), Vijaya (from Andhra Pradesh), Verka (from Punjab), Saras (from Rajasthan), Nandini (from Karnataka), Milma (from Kerala) and Gokul (from Maharashtra).

Still trade-balance (Exports - Imports) of our dairy industry is not upto the mark when compared to our competitors like China.The root-causal analysis of this problem uncovers that the yields/animal is one-fifth to that compared to our foreign competitors who are ready to foray into our market under WTO regulations.Most of the farmers being illiterate or semi-literate fail to handle their animals properly .This result in poor-health of these animals and unhygeinic conditions.Thus Indian milk is becoming unsuitable for exports.

Technology is getting pervasive these days.I just questioned my self ???
(1)Can we find solution to these problems?
(2)Can we help milk co-operatives become more efficient and productive in cost-effective manner? for ex:-The demand and supply dynamics of dairy industry is highly adhoc.The production of milk varies seasonally and daily for obvious biological reasons.At the same time the demand for milk also vary from day to day and from season to season.Can we develop a decision-making support system that helps in co-ordinating the amount of milk supplied and the volume of the milk demanded?
(3)Can we reduce the delay incurred in milk transport thus reducing spoilage?
(4)Can we increase the transparency , accountability in the entire process (milk societies --> milk unions --> milk federations)?
(5)Can we increase the trust in the co-operative process?Can we improve sales and distribution process?
(6)Can we produce an ease-to-use system in local languages for illiterate farmers who can adopt to it with little education?I am not talking converting illiterate farmers to 100% literate.At least they should be taught how-to-use and how-to-read information on screen.

With these and many questions in mind I searched for whats going on?Being a die-hard fan of InformationTechnology I searched with a lot of hope.Yes! IT rocks.Many people are trying to solve problems at grass-root level.Who says that India is not Shining?I am very much inspired by Sristi.I hope that I will also contribute to grass-root level problems soon.These people are trying to solve the exact problems under discussion through Internet-based information and communication technology (ICT).

I hope that one day AndhraPradesh will become the butter capital of the world!

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