Does Goa Dairy have to be killed, to get SUMUL in?

The December 30 notification allowing a private player, Surat District Cooperative Milk Producers Union (SUMUL) to start its production and marketing has completely shaken the complacent and controversy ridden Goa Dairy, currently the most expensive among milk suppliers in Goa.

While lines have been drawn for and against the decision, the issue is far too complex for a black and white conclusion.

Let’s flesh out the issues. The core lies in the failure of Goa Dairy becoming an effective milk marketing cooperative. While its production has been on the rise, it has been woefully short of its peak capacity of 1.20 lakh litres per day. It continues to be the most expensive among all milk suppliers with a huge difference of almost ten rupees between cost of production and the sale price per litre.  Almost 19,000 farmers are dependent on Goa Dairy, along with 250 direct booths and 1700 shops. The pro-competition and free market argument is that you cannot come in the way of healthy competition which will benefit dairy farmers, who have every right to earn more and shouldn’t be victims of the state milk cooperative which is not allowing farmers to earn as much as they deserve to. The government and prominent MLAs like Pramod Samant of Sakhali state that irrespective of what state Goa Dairy is in, farmers have to come first and if they end up getting a better deal, SUMUL is more than welcome.

However, this may not be the complete picture and the last take. This gives rise to several other questions.Will SUMUL be able to or want to absorb all the farmers who supply milk to Goa Dairy or work with some “special farmers”, including those who have very influential links and are relatives of union ministers. Moreover, the agreement with the Government of Goa does not tie SUMUL down to any government control and regulation. Unlike in Gujarat where the Cooperative department is a stake holder in SUMUL, the Goa Cooperative will have nothing to do with SUMUL which will have a free run on decision making and prices.

But above all this is the quintessential question. While encouraging a private player to improve the lot of farmers may be commendable, does it have to be done by almost allowing a state run cooperative to whither away and die? The state government has actually taken a stand that since Goa Dairy is beyond control, let a private player run Goa Dairy to the ground. This decision is an admission that the state is not capable of, through its cooperative moment, to protect the interests of its dairy farmers. This is a pitiable admission to make.

As long as Goa Dairy functions, the government has to back it, find ways to take it out of the current mess and lend a helping hand. What the government is doing instead is that it is batting for the private competition from outside the state. You cannot forget that SUMUL is a creation of a robust milk cooperative movement, which Gujarat has pioneered. Its success is due to the innovations and support that its home state has given. What Goa is doing is just the opposite. It is killing a local enterprise.

As far as farmer benefit goes, let the farmers thrive in open competition but the Goa Dairy vs SUMUL fight is not of equals. It’s a fight between the hopeless and the powerful.

Therefore, the stand of the MGP,  a partner in the present government, that there needs to be a rethink and a detailed study to see the benefits of the entry of SUMUL, is praiseworthy. MGP secretary Sudin Dhavlikar’s statement that the MGP will appoint a committee of experts to study and look into the possibility of ill effects on Goa Dairy and its farmers in case of SUMUL commences its dairy business, is welcome.

This is something that the state government should have done before allowing SUMUL to enter Goa.