From UPSC perspective, the following things are important :
Prelims level : Anand Model
Mains level : India's dairy sector
- Amul, the country’s largest dairy player, announced on April 5 that it would supply milk and curd through e-commerce portals in Bengaluru.
- The announcement was met with opposition from Kannadigas, who saw it as an attempt to threaten the iconic Nandini milk brand of the Karnataka Milk Federation (KMF).
- The Amul vs. KMF row turned into a political tool in poll-bound Karnataka.
- Dissenting sections expressed fears that Amul would eat into the market of Nandini and pose a threat to its business in the state.
- The ruling government was accused of attempting to privatize the milk sector and “finish off” a home-grown product.
A quick backgrounder
- Both Amul Dairy and KMF are successful examples of adopting the three-tiered ‘Anand’ model of dairy procurement.
- Farmers supply milk to dairy cooperatives at the village level, which is then procured by milk unions at the district and state levels.
- There are 16 district milk unions in Karnataka supplying milk to the dairy cooperatives.
- KMF provides competitive prices to dairy farmers.
- KMF corners most of the market share for surplus milk provided by farmers in the state.
Anand Model of Dairy Procurement
Why are people protesting?
- Overpricing: The pricing difference between Amul’s toned milk and Nandini’s toned milk was highlighted, with Amul’s milk priced at ₹54 per litre and Nandini’s at ₹39 per litre.
- Unhealthy competition: KMF’s online presence in the state could create unhealthy competition with Amul’s online presence, despite the pricing difference, according to the federation.
The turf war
- The KMF is the second-largest milk cooperative in India after Amul.
- While Amul and KMF compete in neutral regions like Mumbai, Nagpur, Goa, Hyderabad, and Chennai markets, they have not clashed on home turfs.
- Karnataka is a milk-excess market that meets the needs of the state and exports surplus to other states.
- KMF plans to write to the National Dairy Development Board, requesting it to direct Amul not to venture into the Bengaluru market and concentrate on milk-deficient states.
Clarification by Amul
- Amul clarified that it was launching its fresh milk and curd only for a niche market through e-commerce channels and not through the mass market distribution network.