After Karnataka, Amul faces resistance in Tamil Nadu: Here's why
Tamil Nadu Chief Minister MK Stalin has sought Union Home Minister Amit Shah's immediate intervention to stop national milk giant Amul from venturing into the state, especially in the milk shed of the state cooperative, Aavin. Stalin said the move by the Gujarat-based Amul would create unhealthy competition between cooperatives engaged in procuring and marketing milk and milk products.
Why does this story matter?
- During the assembly election campaign in Karnataka earlier this month, a political storm erupted after Amul announced it would deliver milk online in Bengaluru.
- Various parties, including the Congress, strongly opposed it, terming it an attempt to trample upon Karnataka Milk Federation's (KMF) Nandini brand.
- The controversy was further fueled by Shah's alleged statement on the two milk cooperatives' merger.
Amul's cross-procurement will exacerbate problems for consumers: CM Stalin
While talking about Amul's possible plan to procure milk from farmers in Tamil Nadu, CM Stalin said, "Such cross-procurement goes against the spirit of 'Operation White Flood' and will exacerbate problems for the consumers given the prevailing milk shortage scenario." "This act of Amul infringes on Aavin's milk shed area which has been nurtured in a true cooperative spirit over decades," he added.
Stalin says Amul's approach may lead to 'unhealthy competition'
The CM also expressed concern that Amul's approach might lead to "unhealthy competition" among cooperatives in the state. He went on to say that regional cooperatives had been the backbone of dairy growth, managing the producer-consumer relationship and preventing undue price spikes.
Tamil Nadu Stalin's letter to Amit Shah
Amul announces collection centers in these districts
According to reports, Amul has already established a plant in Chittoor, Andhra Pradesh, and milk procured from Vellore, Tamil Nadu, is being routed to this plant. Amul has also announced the formation of milk collection centers in Tiruvannamalai, Kancheepuram, Ranipet, Vellore, and Tiruvallur districts of Tamil Nadu through self help groups (SHGs) and cooperatives at the village.
Local brand Aavin's monopoly under threat from Amul
According to IANS, Amul currently purchases 3,000 liters of milk from Vellore and plans to boost that purchase to 30,000 liters each day. At the moment, Vellore supplies Aavin with 1,75,000 liters/day, but Amul is gradually but steadily expanding its purchase. With the arrival of Amul, it is feared that Aavin will lose its monopoly on milk procurement in the state.
Amul luring producers, delivery agents with good margin
Aavin reportedly pays Rs. 32-34 per liter of milk produced from farmers, but Amul pays Rs. 36/liter and collection agents are paid 50 paise/liter on the spot. This is a more tempting proposition to the milk agents who are involved in obtaining and organizing milk for Aavin. Such alluring tactics will surely help Amul slowly infiltrate the markets in Tamil Nadu.
What is Amul v/s Nandini controversy?
The Nandini versus Amul controversy in Karnataka erupted after Amul shared a tweet in April saying, "The #Amul family brings in some taaza into #Bengaluru city. More updates coming in soon. #LaunchAlert." Karnataka politicians opposed the move, with Congress's Siddaramaiah (now CM) even appealing for Amul's boycott in support of Nandini. However, the BJP argued that Amul ventured into Karnataka with farmers' support.