Sunday, July 16, 2017

Think inclusion (41st DP 1st to 15th July, 2017)


Dear friends,

Finally after a long wait  GST  got implemented in India. It reminded me of Y2K syndrome at the time of turn of the millennium in the year 2000. There were doubts, apprehensions and an unknown fear that what would happen to all the computer controlled systems in the world in 2000 , but everything went fine and nothing happened.

History repeated itself on July 1 on GST roll over and everything looked under control. Dairy sector has welcomed the move and even  large dairy players endorsed that gst would have positive impact on branded dairy consumption in the future.

The news of the fortnight was JICA offering around 20000 crores for dairy development in the country. It is planned to have additional milk chilling capacity of around 5 crore liters per day through 1.05 lacs bulk milk coolers. The fund would also further be utilized to replace/ expand existing infrastructure of milk processing as created at the time of operation flood.

Since the beginning all such large funds have done wonders in Indian dairy sector and have also consolidated the much needed infrastructure for dairy value chain. Operation flood program is a global bench mark for dairy development. It enabled India to increase its milk production capacity around 9 times in 65 years.

Today if we look at very basic statistics then India produces around 40 crore litres of milk per day and almost half of it i.e 20 crores come to the market . Organized sector receives around 8-9 crore litres per day and rest goes to the unorganized sector through conventional trade channels of Milk man, Halwais, tea shops etc.

Private sector has also evolved over the same period and without much of subsidy or support from the government , today it is building dairy footprint of India shoulder to shoulder with government or public sector by investing on its own. The share of milk handled in organized sector by private sector is almost 50 percent.

However whenever such subsidies or funds come like from world bank for National Dairy Plan or current fund from Jica, private sector is hardly included in utilization of those funds. The infrastructure is developed and handed over to state run federations without much of accountability in terms of ROI or market development ( barring a few state federations which are doing good).

I raised this issue a few years back in one of the CII led committee and proposed that why not private sector is considered as an eligible partner for utilizing these funds or coveted National Dairy Plan  under PPP. 

If government plans to offer 1 lac bulk milk coolers free of cost to state run cooperatives in particular then why can not it be offered to private sector at say 50 percent subsidy. Same is true for the private dairies which are doing fantastic job for farmers in north , west and south India to be benefitted from these funds to augment their capacities and expand milk collection. When stakes are being put up by the private player, the chances of gaining success also improves.

I think it is high time for Indian government to think inclusive and develop a robust selection criteria for private sector to be part of dairy development in India which they are doing otherwise also by taking capital from the market at high cost of capital.

I request all the stakeholders to Think Inclusive to build India really the largest producer of cow milk also by 2026.

Happy e reading

with best regards

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

Saturday, July 1, 2017

Dairy Stock price rise: Modi ji link ??? (40th DP 16 to 30 June, 2017)


Dear friends,

I would like to open this newsletter with a quote on Media ; 

"All media exist to invest our lives with artificial perceptions and arbitrary values. Marshall McLuhan"

While going through a news on dairy stock gaining momentum in stock exchange after Modi ji's government came, I started to find the correlation. Though a lot of reasoning was done about them of selling more milk at higher EBIDTA as against the competition and their entry into North India and taking over of Reliance industry. Suddenly thinking about the lineage of the organizational tree I was thrilled to see that one of the founder of the organization also again came into the power ( after remaining leader of opposition for a recored time) at the same time when Modi ji came . Probably media chose to attribute grand success to Modi ji rather than the most dynamic leader and visionary who gave Indian dairying a new paradigm with Heritage brand.

After a long time I saw news related to R&D and new product development requirements in Indian dairy industry and saw that a few of the private players are looking beyond India for these services. I felt pity on the capability being developed at premier dairy and food institutions in the country who over decades could not offer even a single dairy product which could be considered as a hallmark of disruptive technology meeting Indian palette.

 The food regulator FSSAI accepted that there has been milk adulteration in unorganised milk and shared their nationwide plan on Milk Quality monitoring. Based on my recent personal experience , I would like to take it to a slightly different but worth mentioning tangent. Last week I attended a Detox camp in South India where I got enlightened on food and its impact on our body. One of the area which has been neglected to a large extent is use of insecticide and pesticide and a weak regulatory (almost non existent) on primary food produce including milk. The way these chemicals are damaging our lives is inexpressible.  

I do not know that why till date any authority in the country has taken this crisis seriously from enforcement perspective. Interestingly there is full enforcement , fine, penalty, for milk not meeting fat or snf standard by even 0.1 percent or certain milk in which high quality milk powder is added to meet the standards, etc. However when it comes to selling pure poison mixed with food and food products in the market place, there is no sampling, no enforcement and no punishment to the best of my knowledge.

Dear stakeholders it is not a personal grievance but the way cancer is spreading like cancer in our society ,we may soon become Cancer capital of the world. 

I have one suggestion only and i.e to make all large fertilizer/pesticide/insecticide manufacturing companies which are huge in size and turnover to play responsible and they should be made responsible for setting up labs/ mobile labs facilities to ensure that their products are being used as per the norms, and the final products reaching the local mandis meet those norms. Let the sampling and surveillance is conducted by their field officers in joint collaboration with Mandi samiti, FCI, Agri marketing board etc of all states.

We are a growing nation but there is a great uncertainty that we will be able to enjoy this growth and change together with our near and dear ones. I may be emotional in words but I mean it ,and I would like whole fraternity to ensure at their end for producing, procuring, processing and marketing safe milk and milk products to the consumers.

Looking forward to suggestions and advise by one and all on how to tackle this menace of chemical residue in our agri produce.

Happy e reading.

yours truly,

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