Rajasthan's dairy federation follows Amul's footsteps

Plans to sell the Saras brand of milk in other states

The Rajasthan Cooperative Dairy Federation (RCDF), which sells milk and dairy products under the Saras brand, is following in the footsteps of Amul (GCMMF) to sell products outside the state. While it already supplies milk for the Delhi Milk Scheme (to Mother Dairy) it has also started supplying in Ahmedabad, an Amul stronghold.

Moreover, the cooperative has drawn up plans to upgrade its processing plants, increase production and spread to Uttar Pradesh and Madhya Pradesh as well, where there is a huge unorganised market.

RCDF processes 2.7 million litres per day (mld) on average, and plans to increase this to four mld within two years.

Rajesh Sharma, administrator and managing director, RCDF, said, "Investments worth Rs 500 crore have been planned to upgrade the 21 existing processing plants." He said RCDF is also looking at starting new plants under public-private-partnership (PPP) mode. He added that talks are on with Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand, for technology transfer to increase RCDF's plant efficiency.

GCMMF has a pan-India presence with its Amul brand. It even set up processing plants in Uttar Pradesh and West Bengal and started local procuring.

RCDF, too, aims to become a pan-India brand. As for its procurement requirements after the expansion of capacity, Sharma said Rajasthan produces 4.5 mld of milk, of which about 50 per cent is the marketable surplus.

Amul is still a long way ahead of RCDF. It processes 28 mld of milk, and procures about 14.9 mld. This has risen considerably in the past few years; in 2009-10 it was around 9.09 mld. About 13 per cent of its milk is sourced from outside Gujarat.

GCMMF's entry into other states, where it is setting up processing plants, is expected to institutionalise and organise the markets there. "Wherever Amul has entered, farmers have benefited as it sets a benchmark for procurement prices," says R S Sodhi, managing director of GCMMF.

Punjab, for example, has large farms. But, most farms focus on breeding animals, rather than dairy. This is because Punjab has a huge unorganised market for milk. The Punjab State Cooperative Milk Producers' Federation, which sells under the Verka brand, procures 1.2-1.4 mld, three to four per cent of the state's milk production. The rest is procured by private dairies and small players.

The National Dairy Development Board estimates demand milk in the country to rise to 180 million tonnes (mt) by 2022 from 140 mt now. The country's production has to increase by 5.5 mt every year to achieve this.