Goa Dairy in troubled times

Sharp decline in sales and the ouster of the chairman in an unprecedented no-trust motion on Wednesday soured both relations and revenues at the Goa Dairy in Curti-Ponda.

Goa Dairy has regularly been in the news for the wrong reasons. In July 2005, Chief Minister Pratapsing Rane criticised the quality of cattle feed produced by the dairy, stating it was both substandard and expensive in comparison to competitive products.

Barely two months later, Mickky Pacheco, animal husbandry minister, and FDA officials raided the dairy's plant, following complaints regarding substandard milk.

To add to its troubles, average milk sales have sharply declined from 93,392 litres a day in January to 75,742 litres in May.

"Goa Dairy was once a profit making body. But since March, it has been generating monthly losses of about Rs 20 lakh," says Anup Dessai, director of Goa Dairy. While some say the drop in sales is due to the hike in milk price in January from Rs 15.50 to Rs 16.50 a litre.

Some directors at Goa Dairy and a number of milk producers have, instead, alleged that sales have plummeted mainly due to mismanagement at Goa Dairy.

Sale of homogenised milk, launched by the dairy in July 2005, plunged from 3,510 litres per day in January to 131 litres in April. In May not a single litre of homogenised milk was sold. Dessai has attributed the plunging sales in homogenised milk to the "sheer failure in marketing policy".

According to official sources, sales at Goa Dairy have steadily declined over the past few months, although there is high demand for milk.

Some private milk producers from outside the state have capitalised on this and have notched up increased sales.

In addition, decline in local procurement and an increased dependence on out-sourcing milk from other states has only added to Goa Dairy's woes.

"Local procurement can be raised if proper cattle feed is made available to farmers. But in the last few months, Goa Dairy's cattle feed plant has failed to meet demand for cattle feed," said Laxman Joshi, a milk producer and director at Goa Dairy.

According to Anup Dessai, the Karnataka Milk Federation at Kolar near Bangalore has been the main supplier to Goa Dairy for the last six years.

"We had no problems with Kolar for the past five years. Then last year, some directors began to take commission from private parties to supply milk to Goa Dairy. As such, Goa Dairy reduced its regular order from Kolar. In turn, Kolar demanded higher rates because Goa Diary placed a small order," he added.

Commenting on Goa Dairy's cattle feed plant, Dessai said, "I had set up a committee to study the market situation, before making purchases."

"This practice reaped in good results. After I ceased to be chairman, this system was stopped and this has affected the cattle feed plant," he added.

On the growing losses at the cattle feed plant, Dessai said the problem arose after cotton seed extraction, worth a staggering Rs 1.2 crore, were purchased for the plant in December 2005 and January 2006.

"We were told that the materials were bought at cheaper rates. But, when we compared this rate with other milk unions, we found our rates much higher. An inquiry is now being conducted in the matter," Dessai said.