Amul’s entry into TN a moral violation: Mano Thangaraj

CHENNAI: Dairy Development Minister Mano Thangaraj has said that the state would definitely increase milk procurement price. In this fireside chat with K KARTHIKEYAN, the new Dairy Development Minister, said that Aavin has inherent strengths to be competitive in the market and they perceive the entry of Amul not as a threat, but a moral violation.

You were doing well as IT Minister. How did you adapt to the sudden portfolio change?

Everything is an experience. IT is all about promoting our state as an investment destination and ensuring easy delivery of online services to the people and facilitating data centric governance. I took a series of constructive actions in last two years.

Dairy or Aavin is entirely different. It’s a PSU, which has social and economic causes. We have two major focuses. One, enhancing milk production and achieving white revolution. To achieve this, a fair price to farmers for milk is important. Services like supply of feed, insuring cattle and services to farmers are imperative. In the consumer point of view, we must supply quality products at reasonable prices. We must balance between the two goals.

We have identified some priority areas, better administrative measures, automation and digitization, on-spot acknowledgement of quantity and quality of milk to farmers, highly-productive machines, quality control and stability measures besides introduction of new products and branding of existing products. Finally, the important one - enhancing milk production. We are chalking out plans for all focus areas separately.

You took over at a challenging time when milk supply dwindles in summer. There were also complaints of Aavin milk shortage in Chennai. Have you addressed the concerns?

There is good progress. Milk procurement has increased. It has reached 30 lakh liters per day. When I took over, it was 28 lakh liters per day. We are planning more.

How did it increase in 20 days?

We must push them. We have a PI (Procurement and Input) team. I have set weekly targets for them. We have created a conducive atmosphere and we are constantly monitoring them. We have cleared minor bottlenecks like eliminating illegal small dairies. We have announced distribution of two lakh cattle at subsidised prices through various schemes. It will definitely enhance production. Now, we only cater to a tenth of the required feed supply to dairy farmers. We are working to increase it and standardise the feed quality. Our milk handling capacity is only 45 lakh Liters Per day (LLPD). We can handle up to 40 LLPD. We are planning to increase it to 70 LLPD.

The total milk production ranges between 150 and 160 LLPD. Aavin procures only 30 LLPD. Now, Amul is also trying to make inroads into Aavin’s area….?

It is only an assumption. We believe in our strength. The Chief Minister has given full support to us. Our concern is only that a state must not interfere in the milk shed area of another state. Amul is also a state product. It is a moral question that they must not interfere in our area. We are not scared of them. We are taking all efforts to strengthen Aavin. At the same time, we must be alert to the threat.

Do you suspect that Amul’s capacity poses a threat to Aavin?

We need not go into that. If we provide the best, people will remain with us.

Unlike Aavin, Amul has the support of the Centre. We saw how Minister Amit Shah personally endorsed Amul in Karnataka. Can Aavin withstand the onslaught?

We are taking constructive measures to expand and strengthen Aavin. Our concern is why are you (Amul) creating an unnecessary competition in our area.

Some say many competitors already exist in TN. Yes. BJP state president K Annamalai says, Aavin only procures a fifth of the total milk produced in the state and there are many players in the state already. He wondered what was wrong in Amul entering TN?

Let me remind you, Aavin cannot procure every liter of milk produced in Tamil Nadu. Farmers will not give everything to us. A part of the produce is consumed by the farmer. A major chunk is lost to local consumption. Excess milk is only given to societies. It is not a logical question even.

Annamalai was trying to justify Amul’s entry. He says there are many players, why not Amul. It is not a fair question. Amul is a different story. Our concern is that improving the services of Aavin to the farmers will strengthen our inherent capacity. We will be able to solve it. Aavin is capable of countering Amul. If needed, tomorrow we (Aavin) will sell in Gujarat. The concern raised by our CM is an ethical one maintained between states. The area they are trying to target is our milk shed area. We don’t think we are less

competent or we fear Amul.

Amul procures at higher price and sells at higher price. Will the farmer not drift towards Amul when it offers more?

We are going to strengthen the services to the farmer. We will surely think of enhancing the procurement price. We will definitely increase the procurement price. Amul offers a wide range of products, but neither Aavin nor Nandhini have that. Also, there is a fear that the Centre is promoting Amul as a national brand? This comes in the backdrop of fears of sweeping reforms planned by the Centre in the cooperative sector…

A society cannot be centralised. Each society has a separate by-law and each state has separate Societies Act. It is not easy. Centre is already biased between Hindi and non-Hindi speaking states and BJP and non-BJP ruled states. No matter what they do, we have our inherent strength. Socioeconomic condition of farmers in TN is better than anywhere in the country except Kerala. We have a good potential. When we tap it, we can be very competitive.

To what extent do you think Aavin must diversify to be competitive?

I have instructed officials to do a demand analysis for new and existing products to study the scope of expansion. After that we will diversify and go for more products. We are going to establish Research and Development for better cattle feed, to introduce new products and automation.

There have been budgetary mentions about Aavin trying to tap overseas markets…

Our primary focus is strengthening Aavin and matching demand and supply in the local market. Overseas markets are our secondary focus.

Where do you see Aavin going from here in a few years? Have you set targets?

Once we increase our handling capacity to 70 LLPD, we can gradually widen our clientele. We are not sure if we will achieve 70 LLPD procurement this year, but we will definitely develop the infrastructure. We have 45 LLPD capacity and we can handle up to 40 LLPD. By the end of this year, we will have facilities to handle 70 LLPD. We have set targets like distributing 2 lakh cattle and supplying better feed to farmers. Reforms have already started. Giving high quality products at affordable prices and giving fair prices to the farmers are our objective.