Amul steps into Tamil Nadu to procure milk at premium
Gujarat Cooperative Milk Marketing Federation Limited (GCMMF), which owns India’s largest dairy brand ‘Amul’, is preparing to start milk procurement in Tamil Nadu. The marketing division of Amul has released multiple advertisements inviting farmers to supply milk in northern districts of the state, including Dharmapuri, Vellore, Krishnagiri, Tiruvannmalai, Ranipet and Kancheepuram districts.
This would be Amul’s second attempt to procure milk from the state through agents after its first unsuccessful attempt five years ago. Amul, however, already has statewide distributors for its products such as ghee, milkshakes and ice creams.
While Amul officials in Tamil Nadu remain tight-lipped, industry sources said milk procured by Amul from the five bordering districts of the state may be moved to Karnataka or Andhra Pradesh. The agents nominated by the GCMMF have held talks with farmers in the five districts and had promised them Rs 1 or Rs 2 per litre more than what is being offered by Tamil Nadu dairy cooperative Aavin.
“During the discussions, Amul representatives have also assured farmers to release payment for milk supply within a day or two and promised monthly or quarterly incentives. But no agreement has been signed yet,” a farmer from Tiruvannamalai said.
Official sources from Aavin said Amul can appoint its representatives to procure milk from farmers in the state as is being done by other private companies but it cannot set up a cooperative society in Tamil Nadu like what it did in Uttar Pradesh and few other states outside Gujarat. “As per existing law, only Tamil Nadu government agency (Aavin) can set up a cooperative society in the state,” they said.
The per-day milk demand in Tamil Nadu is 2.2 crore litres, with one-crore litre of milk being produced within the state and the remaining being bought from neighbouring states. Aavin procures 33 to 35 lakh litres of milk per day.
‘Entry of Amul is not a threat to Aavin’
Amul procures nearly 1.2 to 1.3 crore litres of milk a day from Gurajart, Uttar Pradesh, Madhya Pradesh, Karnataka, West Bengal and few other states and sells its products all over India. M G Rajendran, general secretary, TN milk producers’ welfare association, said, “Competition in the milk market may ensure better price for farmers.
But we were cautious about making huge investments in purchasing new milch cows solely relying on Amul, considering their previous failure. We will closely observe how well they withstand the competition before making any decision.” Officials from Vellore and Dharmapuri districts of Aavin expressed confidence in their strong network of milk suppliers that operates as a three-tier structure.
“Our farmers are exclusively associated with Aavin, and we do not perceive any threat due to the entry of Amul,” he said. Officials said Aavin has rolled out a slew of schemes to support dairy farmers. “These measures include purchase of two lakh milch cows, 50% subsidy premium for cattle insurance, and enhanced supply of cattle feed and fodder,” officials said.
Talks to farmers GCMMF agents had held talks with TN farmers, assured them payments within a day or 2 for milk supplied, and monthly or quarterly incentives