The Hindu : Front Page : Erode milk producers an unhappy lot

Online edition of India's National Newspaper
Tuesday, Jun 26, 2007
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Erode milk producers an unhappy lot

Karthik Madhavan

ERODE: The impending election to cooperative bodies in the dairy sector has brought to fore the issue of disparity in milk procurement price. Unlike their counterparts in rest of Tamil Nadu, milkmen in Erode and a few districts undersell milk.

They complain that they have been forced to do so since 2002 by the National Dairy Development Board (NDDB) and State Government, which decided to rejuvenate the sick dairies in Erode, Dharmapuri, Krishnagiri and Villupuram districts.

As part of the revitalisation deal, aimed at making good the Rs. 14 crore loss the Erode dairy, Aavin, incurred, the NDDB and State Government contributed Rs. 4.5 crore each, and asked Aavin to buy a litre at 50 paise less than the Government-determined price, the milk producers say.

In Erode, about 50,000 milk producers sell over two lakh litres a day to the 750-plus milk cooperative societies, which then re-sell it to the dairy at Chittode. From 50 paise a litre for two-lakh litres, the dairy saves nearly Rs. 1 lakh a day. The fiscal disciplinary measure is to continue till 2009.

Milk producers want the NDDB and Government to stop the “unfair practice” and restore price parity. “With Rs. 1 lakh-a-day savings, Aavin by now must have come out of the financial crisis, and we no further want to lose the 50 paise,” says K. Ramasamy Gounder, president, Erode branch of the Tamil Nadu Milk Producers’ Association.

He alleges that with political patronage more than the required staff was appointed, and Aavin did not market well milk and milk products, particularly milk powder, which led to the loss.

The disparity in price has helped private players and middlemen mint money.

“Middlemen buy milk in Erode and other towns bordering the district and sell it outside the district to make a handsome profit, exploiting the price disparity. In the process, societies suffer poor supply,” points out N. Periyasamy, district secretary of the Communist Party of India.

Given the disparity in procurement price, the Tamil Nadu Milk Producers’ Welfare Association has asked the NDDB and Government to restore parity. At Aavin, Erode, sources say the loss has been compensated but the 50-paise-a-litre measure will continue till the dairy reaches good financial position. They add that efforts are on at State-level to restore parity.

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