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Milk production in Prakasam district set for quantum leap

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Ongole dairy butter being produced for export. –
Ongole dairy butter being produced for export. –

Prakasam district milk producers cooperative union has ambitious plans to improve cattle breed, increase its milk procurement and pay farmers not only best price but also bonus in the next three years. Above all, as milk produced in the district is known for its high fat content, better keeping quality and unrivalled taste, the union wants to exploit this image and create its own brand to garner the market inside and outside the country.

The union is anxiously waiting for 2012 when the National Dairy Development Board (NDDB) would walk away leaving behind the milk powder factory, once acclaimed as the largest in Asia, to its control. The asset worth about Rs. 60 crore can process 3.5 lakh liters of milk and convert the same to 30 tonnes of milk powder per day earning an estimated profit of Rs. 15-20 crore per year. The milk powder factory would help the union turn a new leaf and emerge as the best district union in the State, says Challa Srinivasa Rao, union chairman.

The Prakasam district milk producers cooperative union started its operation in a humble way in 1972 to procure 12,000 liters of milk per day, process and sell. It had chequered history. The procurement rose to 50,000 liters per day in 1980s and NDDB sanctioned a loan of Rs. 21 crore to start the milk powder factory. Though the machinery was installed, the unit was not commissioned as the union was caught in controversies. While the machinery got rusted, the debt burden rose to Rs. 70 crore making the milk powder factory a millstone round its neck. The situation was really dismal when TDP captured the union in 2003 elections and Mr Srinivasa Rao became union chairman.

He took the initiative and persuaded the NDDB to bail out the union from the crisis. The NDDB agreed to waive interest on loan on condition that the union should confine its activities to procurement and leave all other operations to it for seven years.

Following the agreement, the NDDB started the milk powder unit to process 3.5 lakh liters of liquid milk per day. It has been selling liquid milk, butter and milk powder under its Mother dairy brand. The NDDB has been appropriating all the profits to clear. When the agreement ends in 2012, it would go away leaving behind the dairy and milk powder factory to the control of the union.

The NDDB is getting milk not only from Prakasam and Visakha unions but also from Karnataka and Maharastra for conversion to powder for sale all over the country. It exported butter to Ireland last year.

The union on its part increased its procurement from 50,000 to one lakh litres per day in the last six years. But it is facing fierce competition from private dairies. As many as 55 private dairies are operating in Prakasam district, the largest in the State. They procured nearly five lakh litres per day. As the milk produced here has on an average 7-8 per cent fat as against five in other districts, the dairies vie with one another to procure milk here for blending.

To surmount the competition, the union is making concerted efforts to improve breed and keep up its supplies. It is importing 50 buffaloes from Haryana every year and supplying them to primary societies for breed improvement. It is also arranging bank finance to help its members buy two buffaloes each to increase its procurement.

After NDDB quits, the union would be in possession of assets worth over Rs. 200 crore to store six lakh litres of milk, to process 3.5 lakh litres of milk per day, to produce 30 tonnes of milk powder and 80 tonnes of butter per day and export the same to UK and other countries and make a net profit of Rs. 10-15 crore per year. It would then become the biggest district union in the state, says Mr Srinivasa Rao exuding confidence that the union would have golden days ahead.

M. Venkateswara Rao


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