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Cooperative milk industry believes National Dairy Development Board chairman Amrita Patel destroyed much of the founder's vision

Sunday, 9 February 2014 - 9:37am IST | Place: Mumbai | Agency: dna

India’s cooperative milk sector is in disarray as the NDDB chief retires after 16 yrs

The term of chairman of National Dairy Development Board (NDDB) and a clutch of its subsidiaries, may not get renewed. She’s 70 years old now, and a further extension would be against retirement rules. A new chairman takes over from March 1, 2014.

The cooperative milk industry believes Patel destroyed much of the vision promoted by Dr Verghese Kurien, founder of the Gujarat Cooperative Milk Marketing Federation (GCMMF), which runs the Amul brand and, which, in turn, continues to promote the cooperative sector.

So impressed was then prime minister Lal Bahadur Shastri with Kurien’s vision that he decided the same approach should guide the national dairy development policy. It was at his instance, in 1965, that the NDDB was set up. The basic objective of the board was to replicate the Amul model. Dr Kurien was chosen to head the institution as the chairman.

Amrita Patel succeeded him in 1998. During her tenure, she converted divisions of NDDB into wholly owned subsidiaries, thus spinning them away from direct parliamentary supervision. It also enabled key directors of NDDB to get perquisites from a host of corporate entities.

NDDB, the sole shareholder of these companies, has refused to provide dna with the figures. All we know is that NDDB pays Amrita Patel a remuneration of Rs18.3 lakh annually (in addition to perquisites of which we have no details). Dr Kurien stayed on as chairman of GCMMF till 2006. It’s, therefore, interesting to see if Patel could match the pace of Kurien in promoting the cooperative sector. 

According to ministry of agriculture data, it can be seen that except for Gujarat and Karnataka, where Dr Kurien had already made the cooperative movement strong and vibrant, growth in milk production by milk cooperatives was only 9.3% during 2005-2009 (the period for which data is readily available). This means that growth in milk production by cooperatives outside these two states was less than the national average of 44%. It is these two states that allowed the cooperative sector to register an average growth in milk production of 20.6%. The biggest contributor to the growth in milk production for the rest of India was not cooperatives, but the private sector.

While NDDB may like to claim liberalisation allowed private sector to grow faster, a major contributor to the weakening of the cooperative movement was the manner in which NDDB, under Patel, allowed Mother Dairy to purchase milk from the private sector, and not the cooperative sector. But more on Mother Dairy later. NDDB had failed to fulfil the mandate it had received from Parliament. That’s one reason why the cooperative sector will be glad to see Patel go.

The second reason is the manner in which Patel dispensed with Kurien’s commitment to transparency. Patel tried to hide all details – especially financial details – from the public, including the media. This is surprising from a company formed of public funds. Echoing this practice, balance sheets of none of the subsidiaries are available for public scrutiny. This is particularly true of Mother Dairy, which was chastised by the Central Information Commission for not disclosing information in spite of being a recipient of public funds. It was only after DNA badgered NDDB for four years, and also did a series of articles about NDDB, that it finally decided to put up three of its annual reports on its website. However, none of the other annual reports are available, not even those of the 40 odd years which Kurien dutifully put up for public consumption. That is a glaring testimony to the respect that Patel has for transparency and openness.

But the industry may not be very happy with the reported move of having T Nanda Kumar as Patel’s successor.  First, Kumar is a retired IAS officer. The NDDB chairman’s post is an executive post drawing a decent remuneration. Second, Kumar has little knowledge of the milk industry. As cooperative sources point out, the reason why Kurien chose to headquarter NDDB in Anand, Gujarat, was to ensure that it had enough people with a sound knowledge of milk-related issues and cooperatives. After all, NDDB is a developmental organisation. Third, the NDDB Act itself requires the chairman to be “professionally qualified in...dairying, animal husbandry, rural economics, rural development, business administration or banking”.

Kumar’s last posting was as a member of the National Disaster Management Authority. It is strange that his appointment was cleared by none else but the Appointments Committee of the Cabinet headed by the Prime Minister.

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