Andhra Pradesh State Assembly on Wednesday decided to constitute a House committee to look into the corruption and irregularities in Visakha dairy. A.P. Assembly witnessed a heated discussion over the alleged Visakha Dairy scam, during the question hour on Wednesday.
The Telugu Desam Party (TDP) legislators Palla Srinivasa Rao and Velagapudi Ramakrishna Babu, reeling out statistics, said that Visakha Dairy’s transition from a cooperative sector entity to a corporate has led to severe corruption and irregularities.
About 2.5 lakh dairy farmers, who are dependent on the Visakha Dairy were demanding serious action against the family that has virtually taken over the dairy, and using the funds for their interests. The transition and maintenance of Visakha Dairy was a big scam. The Visakha dairy has a turnover of ₹2,000 crore, and 7.5 lakh litres of milk is procured by it. The company is now incurring losses due to mismanagement and malpractices. Using the livelihoods of 2.5 lakh dairy farmers as leverage, crores of rupees have been misappropriated, Mr. Srinivasa Rao said.
The Visakha dairy’s chairman, vice-chairman, and directors all belong to the same family, who established a trust to misuse the funds. The irregularities were so glaring that they were paying a rent of ₹15 lakh to ice cream machinery, while the cost would be around ₹10 lakh, he added.
The MLA accused the management of exploiting farmers by buying milk at lower prices and marketing it for profit. “Those who benefited from government incentives under the cooperative model transitioned to a corporate structure in 2006, misappropriating the assets,” Mr. Srinivasa Rao added.
He further alleged that funds meant for farmers’ welfare were diverted to election expenditures and luxurious buildings were constructed in Chennai and Bengaluru using ₹300 collected from each farmer. He demanded a thorough investigation by the CID, Judiciary or a House committee.
Mr. Ramakrishna Babu accused the Visakha Dairy of illegally amassing wealth by transitioning the dairy into a corporate entity. Assets worth hundreds of crores were misappropriated and properties were acquired in four States through corrupt means. Everything from milk procurement to marketing and director appointments is controlled by one family, facilitating large-scale corruption. The lands and funds allocated for farmers’ welfare were diverted, with benami transactions wiping out the dairy’s assets, he said, and demanded that ₹400-crore worth of land taken from farmers be recovered by the government.
Agriculture Minister K. Atchannaidu, responding to it, clarified that the Cooperative Tribunal had ruled against the company in 2004, and the matter is currently under litigation in the High Court. He also acknowledged that reducing milk prices and increasing feed costs have adversely affected farmers and called for a comprehensive investigation. The Minister proposed the formation of a House committee to investigate the irregularities, a suggestion approved by the Speaker.
