Why Maharashtra’s milk cooperatives are in crisis   

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The Maharashtra government has admitted that Mahanand Dairy, once a profitable state government undertaking, is facing an existential crisis, while the cooperative milk sector is in a tight spot as a fall-out of aggressive marketing undertaken by private players.  

“The private sector’s share in the State’s milk business has risen sharply, with the use of modern marketing techniques. This has had an impact on the cooperative sector and its sales. The worst affected is Mahanand Dairy, which is unable to even take care of daily expenses,” said Maharashtra Animal Husbandry and Dairy Development Minister Radhakrishna Vikhe Patil, while answering a written question in the State Assembly recently.

The minister admitted that while Mahanand has landed in a financial crisis due to “various reasons”, the other cooperative milk dairies in the State were not facing a financial crisis like Mahanand.     

In 2021-22, the average daily milk collection by the government and co-operative dairies in Maharashtra was 0.39 lakh litres and 40.25 lakh litres respectively, compared to 0.50 lakh litres and 40.43 lakh litres respectively in 2020-21. Private dairies in Maharashtra collect over 123-127 lakh kg of milk per day (LKPD).  

Interestingly, the Minister said the government has constituted a committee to ensure qualitative growth in the cooperative milk sector. Earlier, the State government had hinted that the State was considering handing over Mahanand to the Centre through the National Dairy Development Board.     

Strong private players 

The Opposition parties and farmers’ organisations in the State have alleged that milk collection by companies outside Maharashtra, and their sales and expansion, had affected the profitability of the cooperative sector. Mismanagement and political interference were also affecting the functioning of milk cooperatives, and leaders of the Opposition asked the Minister to respond to these issues. However, the Minister dodged the questions. 

Private players have a strong foothold, not only in Maharashtra, but also in other top milk-producing States, that accounted for 88 per cent of the country’s milk production as of 2019-20.