Calcutta, June 3: Mother Dairy, which has bloated up over the years and has been leaking of late, is under the scanner.
The government has asked PricewaterhouseCoopers to study the Dankuni dairy, some 20 km from Calcutta, and suggest ways to turn it around.
Mother Dairy was started in 1978 under Operation Flood, launched by the Nation- al Dairy Development Board to make India milk-sufficient and ensure farmers got the most of what consumers paid and did not suffer because of price fluctuations.
The dairy made profits for 18 years. When its reins were finally handed over to the West Bengal Co-operative Milk Producers’ Federation on the conclusion of the third phase of Operation Flood in 1996, it had an accumulated profit of Rs 19 crore.
“We started with 56 employees and the figure in 1996 was around 550. After the government took over, the employee strength was doubled. Between 1998 and 2002, over 450 people were recruited,” a senior dairy official said.
Another perceived mistake was keeping milk prices steady, though the cost of skimmed milk powder — the key ingredient in milk processing — went through the roof.
“Skimmed milk powder, which cost around Rs 73 a kg around four years ago went up to Rs 170 a kg. But the government preferred being populist. The dairy board would have never been that. It treated the dairy as a commercial venture,” the official added.
Mother Dairy has lost around Rs 20 crore over the past three years. With the arrival of Amul, sales dipped — from 400,000 litres a day to 350,000 litres — in around two years.
The dairy was meant to protect the interests of the rural milk producers by encouraging a co-operative movement and marketing the surplus milk in villages. “But since the government took over, the concern shifted towards consumers. The fixed price hurt farmers,” said another official.
The prices were raised early this year. The operating profit in the past three months has been around Rs 50 lakh.
It could be too little too late. “The hike of Rs 2 earlier this year was the third in six months. But milk powder prices had gone up over 50 per cent and operating losses had mounted substantially by then,” the official added.
A litre of Mother Dairy milk cost Rs 6 in 1978. It costs Rs 18 a litre now.
Besides milk, the dairy sells mishti doi, yoghurt, cottage cheese, ghee and packaged drinking water. It has also started diversifying by selling the produce of other co-operatives through its outlets.
After an earlier study by the same consultant, the government had decided to restructure its dairies in Belgachhia and Haringhata and sell the ones in Burdwan and Asansol.