Saturday, September 16, 2017

Rs 10881 Crore Diwali Bonanza for Indian dairy industry (45th, 1 to 15 Sep, 2017)


Dear friends,

Let us first look at a few of the top news from dairy sector in last fortnight before analyzing the Breaking news in reference to the above captioned subject.

Finally a good news for Indian farmers owning Desi cows and buffaloes  as they would be getting sexed semen so as to counter the menace of male calves in times to come.ABS India has introduced this technique for Sahiwal, Gir, Red Sindhi and Murrah Buffaloes. This has also paved the path for other global companies dealing in germ plasm of high yielding gir ( 5000-6000 litres per lactation) from Brazil. I personally appreciate the efforts of government for a constructive solution in reducing  the possibilities of getting male calves with indigenous cattle. Such technology till date was available to Exotic breed animals only.

We talked about the first PPP dairy model in India of Keventers in our last edition and this fortnight we got another good news wherein Keventers has got plans to invest 100 Million USD ( 25 Million USD or 170 crores received from Mandala Capital) in next 5 years to convert it into a 500 Mill USD venture. Hats off to the commitment of Team Keventers to develop dairy sector in eastern region.

Patanjali strikes back and this time to enter dairy and apparel sector together by this year end. The news talks about the size of the market to be 20 lac crores or 3 Trillion USD which is by chance equivalent to Indian GDP which I could not understand with best of my efforts. The magic of Baba Ramdev is evident in case of Indian consumers but it is the time for Baba  to recreate the same magic over the farmers while entering into dairy sector. We wish him a great success.

First cow milk processing plant ( probably desi cows milk processing plan) to be set up by Saras at Ajmer by spending Rs 253 cores. Currently a subsidy of 133 crores is helping 1191 gaushalas on per annum basis. Such initiatives need to be revisited as for the first time they are based on exclusion rather than inclusion. Technologically we can saggregate any kind of milk in any plant. Amul became the first dairy to make milk powder from buffalo milk in the world. However to do so they did not open up a separate dairy for buffalo milk and its products. I am not sure whether this dairy is required for a federation which has  sustained its operation by either subsidizing the poor captive farmers or by controlling the milk retail space in all major cities of Rajasthan through their milk booths and not allowing others to take the same route. A better decision could have been to invest may be same amount in all the dairies to expand their capacity to handle cow milk separately or using this fund to support 2253 more gaushalas in the state.

Now let us look at the breaking news on Rs 10881 Crore budget for dairy development in India in next 11 years ( around Rs 1000 crore per annum).The break up is as follows :

Beneficiary : 95 lakhs Farmers in 50000 villages ( meaning 190 farmer per village ( on an average)
Employment : 40000 direct and 200000 indirect jobs.
Break up of 10881 Crores        : 
From Nabard as a loan             :      Rs 8004 Crores to be provided to NDDB and NCDC
End borrowers contribution       :      Rs 2001 Crores 
NDDB and NCDC Contribution :      Rs     12 Crores
Dairy department against 
interest subvention                     :      Rs  864 Crores

Infrastructure development 

a. Milk processing Capacity        : 126 Lakh Litres per day 
b. Milk Drying Capacity               : 210 Tonnes  ( Milk equivalent 20-25 lakh Litre per day)
c. Chilling Capacity                     : 140 Lakh Litres per day
d. Bulk Milk cooler                       : 28000 BMC of 5000 liters for creating 140 lakh liter milk chilling capacity per day along with milk adulteration testing machines


Now key questions to be answered in this proposal may be as follows :

a. As it is evident that these funds would be utilized for refurbishment of ailing and old dairy processing plants as well as to create new one. So for that would there be any selection criteria for such units e.g

    1. Which states these plants would be ; 
        
      Amongst 10 states which produces 90% of the milk or rest of the states 
      where demand supply gap is at its peak.
     

      Would it be given to federations making profits or federations in Loss and       if it would be given to federations making losses then how would they 
      bring their borrower's fund ( equity). Would it be through another grant or 
      another loan ?
     
     Is there any scope of private sector with proven track record to get this     
     fund for their dairy expansion plans ? 

     Does this fund cover investments in skill development activities for 
     developing manpower to handle these augmented capacities ?

     Does this fund cover investments in R&D and new product development 
     centers so as to ensure that value added milk products are being offered 
     to the existing infrastructure of the state federation for better realization ?

     Does this fund cover investment in training of manpower in both milk 
     procurement and marketing to make their federations profitable and run 
    more professionally in a sustainable manner without any government     
     grant or subsidy ?

    Does this fund cover investment for start ups in dairy under start up India ?

I feel that sooner or later we will have to develop level playing field for the private sector also other wise the dream of our respected Pradhan mantri ji to create India a country of start ups wont be full filled completely at least in dairy sector.

I am also enclosing a copy of our start up pulse which is a collation of various start up schemes as launched by Government of India for your kind reference and perusal.

Happy e reading

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

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