Amul to procure milk from Bihar

In order to keep pace with rising demand of milk in the country, Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns and markets Amul brand of milk and milk products, is now increasingly looking beyond Gujarat for procuring milk.

This year Amul has started milk procurement from farmers’ cooperative societies in Rajasthan, Haryana, Bihar and Orissa. The move is seen as a step towards increasing milk availability to cater to the country’s rising milk demand and spread the monetary benefits to the larger section of farmers and cattle breeders in the country.

“The objective of procuring from out of Gujarat is to spread the benefits of brand ‘Amul’ to farmers in other states of the country. This has been a farmers’ brand so we believe that the benefits of this brand should reach to all the farmers in India,” said R S Sodhi, managing director, GCMMF.
So far, besides Gujarat, GCMMF had been procuring milk from Maharashtra and West Bengal. In the past 6-8 months, the federation has started procuring from four more states including Rajasthan, Haryana Bihar and Orissa. The milk procurement is pegged at around 700,000 litres per day (lpd).

“The procurement from these states will improve prices for the farmers in these states. We give higher prices to the farmers than other cooperatives. So, these farmers will get Gujarat’s prices for their milk, which is a beneficial proposition for them,” Sodhi told Business Standard.

Currently, GCMMF pays Rs 425 per kg fat, which is higher by about 20 per cent over the previous year. The move also assumes importance in the wake of dairying business getting a costlier affair. “In recent years, Indian dairy farmers have been facing soaring input costs which has adversely impacted viability of milk production as an economic activity. With declining return on investment, there is a possibility that farmers may simply lose interests in milk business and turn to other activities,” Parthi Bhatol, chairman, GCMMF, said in the federation’s annual general meeting speech last week.

It may be mentioned here that cattle feed and fodder accounts for 70 per cent of milk production cost. “With fodder prices jumping two-fold due to lower production of cereals, milk production has become a costly business,” Bhatol added.

Farmers are also reeling under the impact of steep rise in all major ingredients of cattle feed. The price of de-oiled rice bran, which constitutes 25 per cent to 35 per cent of cattle feed, has increased from Rs 3483 per metric tonne (MT) in 2005-06 to Rs 6618 per MT in 2011. The price of Molasses, which constitute 10 per cent to 12 per cent of total cattle feed has also surged from Rs 3400 per MTs to Rs 4300 per MTs, within last one month.

GCMMF has been growing at a rapid pace and the demand for milk has also been rising. As many as 3 million farmers in Gujarat are currently associated with Amul brand. Now nearly 200,000 farmers from other states too have joined the federation. Overall, the total milk procurement by all the 13 member unions of GCMMF averaged at 9.45 million kgs per day during the year 2010-11, representing a growth of 1.88 per cent over 9.28 million kgs per day achieved during 2009-10.