Dairy farmers in India get about 80-85 per cent of the rupee spent by the consumer: Jayen Mehta
Jayen Mehta, COO, GCMMF, said that income was the most important thing for cooperatives. And there are two ways of enhancing the farmers’ income: higher prices for their produce and minimizing the costs. GCMMF is the parent company of Amul, a brand that stands for success and that has had a major contribution to making India the world’s largest producer of milk. Mehta saw a bright future for dairy farmers and cooperatives.
Jayen Mehta, Chief Operating Officer (COO), Gujarat Cooperative Milk Marketing Federation (GCMMF), said that income was the most important thing for cooperatives. And there are two ways of enhancing the farmers’ income: higher prices for their produce and minimizing the costs. GCMMF is the parent company of Amul, a brand that stands for success and that has had a major contribution in making India the world’s largest producer of milk.
Mehta was speaking at a session of the Dialogue on “Sahakar se Samriddhi: Many pathways” organized recently by Rural Voice in association with Sahakar Bharati. The topic for the session was “Strengthening cooperatives for better income realization”.
Referring to a conference 10 years ago where FDI in retail was being discussed, Mehta said that he had been categorical that FDI might be good for the consumers, but not for the farmers. In India, farmers get about 80-85 per cent of the rupee spent by the consumer. In other parts of the world, only one-third goes to the farmer while the rest is shared equally between the retailer and the processor. Today’s ruling party, which was then in opposition, raised the issue in parliament and prevented the bill for FDI in retail from being passed.
“Price,” Mehta said, “is a multi-dimensional thing; you can’t plot it on a single axis.” Those in marketing will tell you about the 4Ps: product, price, place and promotion. “But in the case of farmers, two additional Ps come in: policy and Parameshwar.” The latter refers to unknown factors like timely rainfall while the former refers to the impact of issues like FDI in retail, Free Trade Agreements (FTAs), RCEP etc.
Mehta narrated the story of how they once went to open a branch of GCMMF in the US. The authorities there pointed to the C in the acronym that stands for “Cooperative”. They said if GCMMF wanted to retain the word “Cooperative”, it would not only, as per the American laws, have to team up with the local American farmers but also be a locally registered cooperative. Finally, Amul tweaked its name to GSMMF, where S stood for “Sahkari”. But even this did not work. Mehta said that the new Ministry of Cooperation could make similar laws to protect and benefit the Indian farmers.
Amul is associated with 36 lakh farmers. The annual turnover of the brand is about Rs 61,000 crores. And, Mehta said, all this is owned at Amul by the farmers. The cooperative relates to the consumer, creates value addition and does away with middlemen. The farmers are the owners of all three tiers — production, processing and marketing. This is the model on which Amul works and it is this model that has been replicated by other milk cooperatives across the country.
Talking about the prospects of dairy cooperatives in India, he said that at present 22 per cent of the world’s milk was produced by India. This would go up to 33 per cent in a decade. Of the incremental production in the next 10 years, India’s share will be two-thirds.
Mehta said that cooperatives could play a significant role in increasing the farmers’ productivity and thereby reducing their costs. Productivity can be increased in various ways by the cooperatives. For example, by providing veterinary services round the clock, the facility of cattle feed, app-based payment through common software, the latest technology like artificial insemination, etc.
Finally, Mehta spoke about the consumers’ preferences. He said that consumers wanted to be associated with companies that have a purpose, that are inclusive, and that are community- and sustainability-oriented. Amul, he said, has always been eligible on all these counts. Anyone can become a member of Amul and the share still remains at Rs 10, the same amount which it had been in 1946.
As far as the future of the dairy farmers and cooperatives is concerned, Mehta felt it would be a bright one.