According to her, the Gujarat Co-operative Milk Marketing Federation, also known as AMUL, is the only business that has sorted out its marketing and brand policy without government intervention.
The dairy farmer’s interest
‘Our dairy co-operatives have become very good at collecting the milk in the many thousands of villages, and in processing that milk. But I find that the dairy co-operatives outside the state of Gujarat are too lackadaisical about the marketing of their products. And when the co-operatives aren’t able to sell their milk and dairy products at a profit and enlarge their markets, they lose the ability to collect more milk in the villages. Then the members/dairy farmers of the local dairy co-operatives suffer. On the one hand, they don’t see their milk price increase and, on the other, they can’t increase their milk production,’ says a concerned chairman Patel. In its role as supporter of the Indian co-operative dairy sector, the NDDB has recently been making proposals to improve the marketing efforts. ‘We have hired consultants, organised marketing courses and provided the co-operative dairy sector with interest-free loans so that they can conduct market campaigns. And, as an institution, we ourselves have spent a great deal of money on national marketing promotions for dairy products. In spite of all this investment, we have to admit that we’ve seen less improvement than we would have liked. And that is not good, especially considering the growing competition from the multinationals and other major commercial players in the dairy sector,’ says Amrita Patel.
Amrita Patel is chairman of India’s National Dairy Development Board.
Joint ventures
But, in the interests of the co-operative dairy sector, Patel is not planning to stop here. ‘We have re-analysed our problem. The co-operative dairy structure has grown and that has made it very difficult in a number of Indian states to be market oriented. That is especially true of those states in which the government is very involved in the dairy sector,’ says Patel, outlining the problem. To resolve this situation, the NDDB has decided to support marketing alliances and joint ventures that the state co-operatives enter into with Mother Dairy, a dairy cooperative, with a view to improving their marketing. In Patel’s opinion, this full subsidiary of the NDDB has good marketing professionals and a well-balanced business culture. Mother Dairy’s philosophy is to have a majority interest in any such joint venture. This should ensure that the government has no voice in the collaboration. Furthermore, the proposed model is designed to create enough flexibility in the partnership that a commercial approach can be taken in this highly competitive environment. Nevertheless, this new idea put forward by the NDDB has caused quite a stir in India’s co-operative dairy sector. The collaboration the NDDB is proposing between its subsidiary co-operative Mother Dairy and the other dairy co-operatives appears to be completely at odds with the efforts being made by the AMUL dairy co-operative AMUL in the state of Gujarat. As the next article explains, AMUL is currently developing a strategy to market the products of its colleague companies throughout India under its own brand names AMUL and Sagar.
Better marketing of dairy products should raise the income of the Indian dairy farmer.
Many tasks
The NDDB has, incidentally, a wide range of activities. As shown above, it promotes and funds the organisation and development of the Indian dairy industry. It also contributes to the development of the market, and is the research & development institute for the Indian co-operative dairy sector. In this context, it is developing new and longer-life dairy products. The NDDB also develops and builds dairy factories, milk tankers and even the sales vending machines for loose, fresh drinking-milk. Through another subsidiary, the NDDB makes vaccines for beef cattle and people. Through its full subsidiary Mother Dairy, the NDDB is moreover involved in the production of vegetables and fruit in India and via Dhara Oils and Foods Company (DOFCO) in the production and sale of edible oils.
Article from India Dossier, ZuivelZicht - 14 december 2005  |