The Indian Milk Problem

By D. N. KHURODY

Summary

Delivered as a public lecture under the auspices of the Forum of Free Enterprise in Bombay on 11 June 1974, this address by D. N. Khurody — former Dairy Development Commissioner and Joint Secretary to the Government of Maharashtra, and the Ramon Magsaysay Award-winning organiser of the Aarey Milk Colony — diagnoses why India, owning about a fourth of the world’s cattle, produces only about 5 per cent of the world’s milk. Khurody attributes the low yields chiefly to grossly inadequate fodder and feed, the cattle population outpacing even the fast-growing human population, and the long, capital-intensive cycle (over 1,000 days and Rs. 1,500 per animal) of rearing a calf to a milking cow. He punctures the rhetoric of a coming ‘White Revolution’, arguing that, unlike a crop, milk cannot be raised quickly and that planning has never treated dairying as a priority industry, with only a fraction of a per cent of Plan expenditure devoted to it.

The core of the lecture is a case study of Greater Bombay’s milk supply, which Khurody breaks into six sources — the private cattle trade, Anand (Gujarat), the Aarey Milk Colony, government dairies, imported reconstituted milk, and ‘the municipal water tap’ of adulteration. He recounts how the Aarey Milk Colony, set up in 1949 and run at a profit for years even while distributing subsidised milk to 35,000 families, became ‘a pride of Maharashtra’ through continuous costing, a system of licensee partnership, and high-yielding herds — and how neglect, discontinued costing, abandoned calf-rearing, and the pegging of producer prices to uneconomic levels have since caused herds to dwindle from 16,000 to 12,000 and daily output to collapse from 112,000 litres to an ‘unbelievable’ 17,000. He treats the Gujarat government’s April 1974 freezing of dry buffaloes as ‘temporary expropriation of property … done without notice’.

In his remedial measures Khurody argues it is folly for governments to run milk schemes, pointing to AMUL and to cooperatives and shareholder companies abroad that operate dairy concerns efficiently and at a profit while most government schemes run at a loss. He proposes a businesslike Maharashtra Milk Undertaking — patterned partly on the Milk Marketing Board of England and partly on a public limited company — that would run at a profit, fix quality-related producer prices, license dairies, restore the Aarey Colony, raise equity capital through shares (with one-third of authorised capital reserved for private producers and licensees), pay dividends, and have its shares quoted on the Stock Exchange, with institutions like UTI and LIC free to buy in. The rendered pages carry the lecture through these recommendations to the share-capital proposal.

Key points

• Public lecture under FFE auspices, Bombay, 11 June 1974, by D. N. Khurody, former Dairy Development Commissioner of Maharashtra and Magsaysay Award-winning organiser of the Aarey Milk Colony.

• India holds ~a fourth of world cattle but produces only ~5% of world milk; West Germany matches India’s output with a fraction of the animals.

• Low yields blamed on inadequate fodder/feed, cattle numbers outpacing human population growth, and the slow, capital-intensive (>1,000-day, Rs. 1,500) calf-to-cow cycle.

• Dairying is not treated as a priority in planning; only a fraction of a per cent of Plan expenditure goes to milk, despite cattle’s large share of national income.

• Greater Bombay’s milk comes from six sources: the private trade, Anand, the Aarey Milk Colony, government dairies, imported reconstituted milk, and adulteration (‘the municipal water tap’).

• The Aarey Milk Colony, profitable and a ‘pride of Maharashtra’, has decayed under government neglect — herds fell 16,000 to 12,000 and output 112,000 to 17,000 litres/day.

• Khurody calls the Gujarat government’s April 1974 freezing of dry buffaloes ‘temporary expropriation of property … done without notice’.

• Remedy: a businesslike Maharashtra Milk Undertaking (part Milk Marketing Board of England, part public limited company) run for profit, raising share capital quotable on the Stock Exchange, with one-third reserved for producers/licensees; cites AMUL as a private-sector success.

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