Friday, June 16, 2017

Status Quo is no more a fad (39th DP 1st to 15th June, 2017)

Dear friends,

I would like to begin this newsletter with a quote from Martin Luther King ; “If you are not going to divorce the status quo, you will give birth to mediocrity.” 
Thank god we are  coming out of the ambit of long haul of status quo over cattle welfare, transportation and GST. Last fortnight brought a lot of excitement over these issues. Without being judgmental on whether it is correct or not the best part is that at least these issues have been brought above the threshold by the current government and all stakeholders are now sharing their views and observations over the policy.Luminaries from the star world including Amitabh Bachchan and likes will be promoting cow shelters in India and other programs from Ministry of animal husbandry and fisheries : what better could have been thought about promoting this noble cause.

A few point of worries at least on GST which the industry is looking at might be unclarity on GST to be imposed on machineries from different HS codes like heat exchangers, refrigeration, cold stores, boilers, etc which are to be used for setting up a dairy plant. It is quiet unusual to see that equipments like bulk milk coolers or chillers or cold stores would be under 18 % to 28 % GST thereby making cold chain initiative for milk quality a challenge. I hope that in due course of time the government would take cognizance of the same.

The possible outcome could be more adulteration of milk with neutralizer as a trade off to the high cost technology for preserving it under cold conditions.

I would not like to write more in this issue as it is a time for wait and watch.Lastly t a worth mentioning news is about decision from an  EU courts which prohibits use of terms like dairy, milk, etc on all imitation dairy products which uses plant or non dairy sources for its manufacturing. We have been raising this point of imitation cheese and cream products in India since long and a large number of players are selling it by using some terms which really confuses consumers. The regulator might be interested in noting that down and taking necessary actions.

So happy e reading in this era of excitement and big change.

Your truly

Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)
C-49 Sector-65
Noida 201307

Thursday, June 1, 2017

Declare Cow a National Animal and Dairy Farming a National Occupation (38th DP 16th to 31 May, 2017)

Dear friends,

I never thought of celebrating world milk day this year amidst high uproar over recent proposal by government restricting trade of cattle in India. Last fortnight saw two paradigm shifts happening in history of Indian dairy industry i.e imposition of differential GST tariffs on dairy products and government of India proposal to restrict trade of cattle in the country for certain purposes. There is nothing much to discuss this time except these two topics. So let us raise specific questions related to GST first, the same were being raised by me in my interview published with last week.

a. Is the product classification chosen under GST aligned with the one prescribed under FSSAI ? 
b. Isn't the classification done under GST more subjective and brings in the discretionary element at all levels of tax considerations and this calls for clarifications at multiple levels by the stakeholders to understand it e.g Paneer without containers and brand are tax free and one in container and with brand with 5 % tax. It keeps the string open for  Panir with brand and without container and Panir with containers without brand. However how could one carry panir without container ? Does ice box in which loose panir is carried doesn't come under container category.....However the list is endless.
c. The discretionary power of the taxman to consider certain market value for the product is a step to standardize prices of milk products through out the country... I have no answers to that.

Still it is too early and with time I hope and wish that the system will find better clarity around all these issues in consultation with the industry.

The second issue is much more serious and requires a national consensus before a decision is finally made.The proposed notification on cow trade has two elements and due to unknown reasons the better part of the notification is not much talked about.

The first part of proposal is for animal welfare and talks about around 30 areas wherein animal comfort is to be considered in terms of housing, water, feed, health, breeding etc. This initiative was taken up by World Animal Protection Society and they also produced a brilliant code on animal welfare in collaboration with NDRI.We at Suruchi Consultants co branded the collaterals for farmers with them along with our other dairy associates like DS Group under their CSR programs. However the implementation of code did not happen at mass level due to lack of any federal mandate backing it up. However now it could be made possible but prior to full implementation of animal welfare code at farmer level we need to answer the following three questions :

a. Does the farmer understand these codes ? Who will make farmer aware about these ?
b. Does the farmer has an intent of following this code ? What would motivate farmer to follow this code ?
c. Does following this code make his business sustainable or more profitable ? Is there any premium which he might be getting from its consumers if he keeps his cows happy ?

The second part of the proposed notification simply restricts trading of cattle for any other purpose than farming and trade is also required to be done between two farming entities only .

Since last few months on the same platform of Dairy Pulse we have been asking for a green corridor for transport of animals as well as a robust strategy and policy on scientific management of cattle or so called culling policy.

Whenever we have raised this issues at various forums in front of government representative the answer was that this is a state issue and center can not do anything without making certain constitutional amendment which I atleast do not understand as a simple dairyman. I also do not understand that how could we could make a business sustainable without defining an exit policy for factors making it unprofitable.  

I was also surprised to read news in which it has been proposed to declare cow as a national animal. Atleast I do not have any problem in declaring Cow as a national animal but then declare Dairy Farming as a national Occupation also.

What I understand from anything being coined as a National collateral is that government would be responsible for its protection and sustaianbility.

Today a poor dairy farmer's livelihood is at a stake so declare his occupation as a national occupation and support him for all the losses as well as for all the cost which he has to incur on maintaining unproductive, old, male, sick dairy stock at his home.

By the way I am also interested to know whether the poor farmer who is the locus center of all these proposal has ever been taken into confidence before drafting and implementing such policies ?

It is high time for all of us to sit together and envision Indian dairy industry in these changing times , before it is too late.

Happy e reading !

Yours truly
Kuldeep Sharma
Chief Thinking Officer
Suruchi Consultants (ISO 9001:2008 Company)
C-49 Sector-65
Noida 201307