The debate about Amul Dairy entering the Karnataka market for milk and curd supply shows no sign of abating. When the first Union Cooperation Minister Amit Shah made a startling comment in December 2022 during the inauguration of a mega-dairy in Mandya, that Amul Dairy and the Karnataka Milk Federation (KMF) would be working together, the statement gave rise to consternation among the public and political parties about the implications of Amul Dairy’s entry into the Karnataka market on KMF and its iconic brand ‘Nandini.’
Amul’s dairy products including butter, cheese, ice cream, etc., are already being sold in Karnataka, but KMF is the largest supplier of milk and curds under the brand name ‘Nandini’ in the state. India has 22 state milk cooperatives, and while Amul Dairy is the largest dairy producer in the country, KMF is the second largest.
Apart from the fear of Amul taking over KMF’s Nandini, KMF itself has called the decision of Amul Dairy to enter Karnataka unethical. According to KMF, Karnataka has a thriving dairy cooperative that not only meets the needs of the state market but also exports surplus dairy to other states. In this context, the presence of another government-owned dairy cooperative is being seen as a predatory practice.
Gujarat-based Amul and Karnataka-based KMF compete with each other in several cities across states including Chennai, Nagpur, and Mumbai, but they do not sell their milk in each other’s states.
As the discordant political discourse has only become louder, pro-Kannada sentiments against Amul are also high, where it is being seen as another form of north Indian imposition. Only a fortnight ago, a circular from the Food Safety and Standards Authority of India (FSSAI) asking various government dairies producing curds to call it ‘dahi’ instead of other regional terms provoked furious responses from people as well as the south Indian state dairies, forcing them to withdraw it.
Both Amul Dairy and KMF are successful examples of adopting the three-tiered ‘Anand’ model of dairy procurement where farmers supply milk to the dairy cooperatives at the village level, which is then procured by milk unions at the district and state levels. At present, there are 16 district milk unions in Karnataka supplying milk to the dairy cooperatives. KMF boasts of providing competitive prices to dairy farmers and is so widespread in its reach that it corners most of the market share for surplus milk provided by farmers in the state.
The state BJP (Bharatiya Janata Party) has been trying to defend the decision citing that competition would only help KMF get better and that other Amul products are already on sale in Bengaluru. But with elections less than a month away, opposition leaders have underlined that the merger would undermine federalism since milk cooperatives are under the state list as per the Indian Constitution.
Ever since the Union government set up a new ministry — Ministry of Cooperation — in July 2021 and made Amit Shah its minister, concerns have been raised about the move being aimed at bypassing the powers of the state government and setting up multi-state cooperative societies. Opposition parties have alleged that merging Amul with KMF will amount to the state losing control over its dairy cooperative.
BJP leaders have sought to play down the furore over the issue. Bengaluru South MP Tejasvi Surya claimed that objections from opposition parties arose only because of their hate towards Amul as it is from Gujarat, and because both Prime Minister Narendra Modi and Amit Shah hail from the state.