POLICY NOTE

2001-2002

DEMAND NO.10

MILK SUPPLY SCHEMES

DAIRY DEVELOPMENT DEPARTMENT

Milk is an essential nutrient in the human diet. Milk trade was traditionally a subsidiary occupation in rural areas. Women folk in the villages generally contributed their labour in the upkeep of the animals to supplement the family income. With the development of urban areas the middlemen started buying milk at a very nominal rate from rural areas and sell it in urban centres at exorbitant rates. In the process neither the producer nor the consumer was benefited. Only the middlemen were deriving the benefits of our unorganised dairying activity. With the advent of the organised Dairy Development, this picture has changed totally. The role of middlemen has been eliminated and the interest of the milk producers in villages is protected by the formation of milk producer’s Cooperative Societies. The milk producers are assured of a remunerative price for the milk produced by them through a stable, steady and well organised market support. Similarly the orgainsed sectors in urban areas through Cooperatives are able to cater to the needs of the consumers by supplying quality milk at reasonable price. This change has been made possible mainly through setting up of modern dairies, Chilling centres and apply good and improved methods in processing and transporting milk. Standard of living of the rural members of the Milk Producers Cooperative Societies is improved through the systematic approach and performance of the Dairy Development Department.

The Dairy Development Department was established in 1958 and functioning under the control of commissioner for Milk Production and Dairy Development. The Commercial activities of the Dairy Development Department were handed over to the Tamil Nadu Dairy Development Corporation in July 1972, which came under the control of Tamil Nadu Cooperative Milk Producers' Federation in February 1981.

The Producers’ Societies are based on the " Anand" pattern, which has the following merits.

Milk is paid for on the basis of fat content, unlike the traditional societies where payments are mainly on volume basis.

They are not loan oriented.

The societies are basically oriented towards producers’ interest.

They don’t undertake any significant local marketing.

The inputs for enhancement in milk production like veterinary service, artificial insemination, balanced cattle-feed are supplied to the members at their doorsteps.

The Secretaries of Producers’ Societies are being trained in artificial insemination work & first aid.

The main functions of the Dairy Development Department are

Organisation and registration of Producers’ Societies.

Supervision and control of all milk cooperatives, District Milk Producers’ Union and Tamil Nadu Cooperative Milk Producers' Federation

Enforcing the provision of Tamil Nadu Cooperative Societies Act 1983 and Tamil Nadu Cooperative Societies Rules 1988 as far as they relate to milk cooperatives.

To carry out the Dairy Development activities, in the district there are 23 Deputy Registrars (Dairying) covering all the districts with supporting staff like Cooperative Sub Registrars and Senior Inspectors. In the Head Quarters, Commissioner for Milk Production and Dairy Development is head of the department who is the Registrar for the Milk Cooperatives. He is assisted by Deputy Milk Commissioner (Cooperation), Deputy Registrar (Head Quarters), Accounts Officers, Executive Engineer, Agriculture Officer with supporting staff like Cooperative Sub Registrars, Superintendents, Senior Inspectors etc., The total sanctioned cadre strength of this department is 848 for the entire state. To provide Animal health Cover and Artificial insemination facilities, 11 Milk Procurement Teams,13 Mobile Veterinary routes are functioning in the Districts of Virudhunagar, Ramanathapuram, Sivagangai, Kanyakumari, Thirunelveli and Tuticorin. The Operation Flood Schemes were implemented with the funds provided by the National Dairy Development Board only in the following districts of the state:

Chennai
Kanchipuram
Thiruvallur
Villupuram
Cuddalore
Vellore
Thiruvannamalai
Dharmapuri
Salem
Namakkal
Erode
Coimbatore
Madurai
Theni
Dindugal
Nilgiris
Trichy
Karur
Perambalur
Thanjavur
Thiruvarur
Nagapattinam
Pudukottai
Ariyalur

To facilitate better administration and qualitative improvement of Integrated Dairy Development there are 17 District Cooperative Milk Producers’ Unions covering all districts.

Apart from controlling the activities of all milk cooperatives in the state the Dairy Development Department is also controlling the activities of private dairies which are handling more than 10,000 litres of milk per day or milk product containing milk solids in excess of 500 tonnes per annum under the Milk and Milk Products Order 1992.

PROGRESS UNDER DAIRY DEVELOPMENT SECTOR

------------------------------------------------------------------------------------------------
Sl.No. Items As on 31.07.2001
------------------------------------------------------------------------------------------------

1. No.of Primary Milk Co-operative 10,041
    Societies (Including Consumer
    Co-operative and supply Societies).

2. No.of District Unions 17

3. No.of members 22.74 Lakhs

4. Milk Production (by Societies) 21.48 LLPD*

5. Milk Procurement (by Unions) 17.51 LLPD

6. Milk Marketing in Chennai City 7.65 LLPD

7. Dairies (in Nos.) 20
    Capacity 28.39 LLPD

8. Chilling Centres (in Nos.) 40
    Capacity 11.38 LLPD

9. Automatic Vending Machine Units 213
   *LLPD - lakh litres per day

PROGRESS IN THE FORMATION OF MILK PRODUCERS CO-OPERATIVE SOCIETIES:

During 1999-2000 as against the target of 387 Milk Producers Co-operative Societies, 325 societies have been formed up to 31.3.2000.

During the year 2000-2001 as against the target of 275 Milk Producers Co-operative Societies, 163 societies have been formed till 31.3.2001.

SALIENT FEATURES OF MILK CO-OPERATIVES / PRIMARY MILK CO-OPERATIVE SOCIETIES (IN TAMILNADU)

a) Milk Producers’ co-operative Societies 9,977

b) Milk supply Co-operative Societies 1

c) Co-operative Dairy Farm 1

d) Milk Consumers Co-operative Societies 61

e) Co-operative Milk Supply Union 1

f) District Co-operative Milk Producers Unions 17

g) Tamilnadu Co-operative Milk Producers’

Federation (State Level Federation) 1

SCHEMES IMPLEMENTED BY THE DAIRY DEVELOPMENT DEPARTMENT

1. INTEGRATED DAIRY DEVELOPMENT PROJECT IN VIRUDHUNAGAR DISTRICT.

The National Cooperative Development Corporation has granted financial assistance of Rs.325.85 lakhs as loan and the state government granted financial assistance of Rs.139.65 lakhs as share capital / Subsidy for setting up of a new dairy complex at Srivilliputhur in Virudhunagar district and the project was completed at a total cost of Rs. 465.50 lakhs. An additional amount of Rs. 98.68 lakhs has been requested from National Cooperative Development Corporation for provision of additional facilities like effluent water treatment plant, etc. The matter is under consideration of Government.

2. WESTERN GHAT DEVELOPMENT PROGRAMME

A sum of Rs.9.32 lakhs has been provided in the Revised Budget 2001-2002 for provision of infrastructure facilities like can, Milk – O – Tester, LN2 Container, Chaff Cutter, Trevis etc., in the Districts of Erode, Coimbatore, Dindugal, Madurai, Theni, Virudhunagar, Tirunelveli & Kanyakumari.

APPOINTMENT OF SPECIAL OFFICERS

In pursuance of G.O.Ms.No.204, Co-operation, Food and Consumer Protection Department, dated 25.5.2001, Special Officers were appointed to the Primary Co-operative Societies whose terms of office of members of Board, have already expired as per section 33(10)(aa) of the Tamil Nadu Co-operative Societies Act 1983. Similarly the elected members of the Primary Societies elect their Presidents and by virtue of their post of President of the Primary societies, and thereby elected as Director of the District Co-operative Milk Producers' Union concerned also cease to be the Director of the District Cooperative Milk Producers' Union. Accordingly Special Officers were appointed to 9,070 Primary Co-operative Societies. The District Collectors were appointed as Special Officers for 16 District Co-operative Milk Producers' Unions on 25.5.2001 and in respect of Kancheepuram-Tiruvallur District Co-operative Milk Producers' Union, the General Manager of Tamilnadu Co-operative Milk Producers' Federation, Ambattur has been appointed as Special Officer. The Managing Director, Tamilnadu Co-operative Milk Producers' Federation has been appointed as Special Officer for the Tamilnadu Co-operative Milk Producers' Federation.

ESTABLISHMENT OF CONTROL LABORATORY

A control Laboratory at a cost of Rs. 69.78 lakhs under the control of Commissioner for Milk Production and Dairy Development, Chennai - 51 with Government of India assistance of 100% subsidy will be established under Milk and Milk Products Order 1992. This laboratory will analyse and take up the analytical checks to ensure the supply of safe good quality milk and milk products, by collecting samples from Dairies and confirm to prescribed standards. During the year 2000-2001 a sum of Rs.8.10 lakhs has been released by Government of India. In the year 2001-2002, Government of India have sanctioned a sum of Rs.34.16 lakhs.

PART - II SCHEMES

In order to provide infrastructure facilities to dairy Cooperatives a sum of Rs.60/- lakhs has been provided as subsidy in the Revised Budget 2001-2002 for the following items.

THE TAMILNADU COOPERATIVE MILK PRODUCERS ' FEDERATION LIMITED

Dairy Development activity in Tamilnadu started early in 1920. The first Co-operative Dairy was set up in Chennai City in 1927. The Dairy Development Department was established in 1958. The first modern plant for handling milk with a capacity of 50,000 litres per day of pasteurised milk was established in the year 1963 at Madhavaram near Chennai with the aid from New Zealand. A dairy to handle 50,000 litres of milk a day was set up at Madurai with UNICEF assistance in 1967. The Department for Dairying began organising milk procurement through village co-operatives in the year 1962. The system consisted of supervised milking at the village level and transport of the raw milk in aluminium cans through hired transport to a milk chilling plant or directly to the dairy. The farmers were paid on volume basis. There were separate rates for cow milk and buffalo milk. The societies advanced loans to farmers for purchase of cattle. Under the Five-Year Plans of the State Government a number of pasteurisation plants were set up in the Co-operative Sector in major towns. In 1972, the milk procurement was 40,000 litres per day.

OPERATION FLOOD PROGRAMME – I:

The Tamilnadu Dairy Development Corporation was formed in 1972 as a Company registered under the Companies Act, 1956 for implementing massive Dairy Development Programme called "OPERATION FLOOD-1" with a total package of Milk Production, Procurement, Processing and Marketing in the Districts of Chengalpattu, Villupuram, Cuddalore, Vellore, Dharmapuri, Salem, Erode, Coimbatore, The Nilgiris and Madurai districts. The National Dairy Development Board extended technical assistance while funds for the programme were generated by Indian Dairy Corporation by utilising Skimmed Milk Powder and Butter Oil donated under the World Food Programme.

On introduction of this scheme, the testing of milk of the individual farmers for the FAT at the society level ensured the milk payment based on the quality on weekly basis with assured marketing throughout the year. The Producers are also paid Bonus out of the profit made by the society at the end of every year as part of the differential cost in the purchase price. These have induced more enrolment of farmers under the cooperative ambit and helped to form viable societies in the long run.

Subsequently in 1978 the Government have adopted a three tier system– Milk Producers' Cooperative Societies at the village level; Union of Producers' Societies at the District level; and an apex organisation viz., Federation at the State level to take responsibility of the implementing the Operation Flood.

The Tamilnadu Co-operative Milk Producers' Federation Limited was constituted on 1st February, 1981 with the introduction of Anand pattern in Tamilnadu.

During the Operation Flood programme – I, Nucleus Jersey and Stud Farm was established at Udhagamandalam by importing exotic jersey bulls and pregnant heifers. They formed the foundation stock for the bull mother farm. During the year 2000-2001, 12.22 lakhs of frozen semen straws were produced from jersey/Jersey cross-bred, Holstein Friesian and Holstein Friesian cross bred bulls.

A sum of Rs.14.26 crore was released under the programme. During the period about 2,500 Milk Producers' Cooperative Societies were organised by enrolling 2,82,000 farmers and building 3.75 lakh litres processing capacity together with powder manufacturing capacity of 20 metric tonnes were set up.

OPERATION FLOOD PROGRAMME – PHASE II:

In continuation of the first phase, which created a good fluid milk demand in urban area for increasing the procurement, Operation Flood-II emphasised on animal productivity. The second phase extended these activities to 3 more districts of Tiruchy, Thanjavur and Pudukkottai with an outlay of Rs.32.43 crore. The Tamilnadu Dairy Development Corporation, a basis for Operation Flood Programme was reconstituted as Tamilnadu cooperative Milk Producers' Federation in 1981. This set up

offered milk processing facilities and the technical inputs, needed for rural milk production. During this phase, the Salem Dairy was completed, the processing capacity of the Mother Dairy at Ambattur was expanded from 2.0 lakh litres per day to 3.0 lakh litres per day, 75 AVM booths were installed in Chennai city, while new chilling centres at Thiruvannamalai, Tiruvallur and Athur were also commissioned.

Apart from this, a Buffalo Frozen Semen Station was established at Erode to provide effective breeding cover of black cattle. In order to maintain an uninterrupted supply of liquid nitrogen, a 45 litres per hour capacity Liquid Nitrogen Plant was also commissioned in Salem. Four District Unions of Villupuram, Vellore, Salem and Madurai were given one Training Centre each for training village level workers, Secretaries and Management Committee Members of Milk Producers' Cooperative Societies. At the end of this phase, 5,329 Primary Milk Cooperatives have produced an average of 8.0 lakh litres per day and during the flush season the procurement level went upto 10.15 lakh litres per day and 8.40 lakh farmer producers were benefited.

OPERATION FLOOD PROGRAMME – PHASE III

In order to strengthen and consolidate the newly created three tier system of "Anand" Pattern of Cooperatives for sustained future growth, a proposal at the cost of Rs.66.26 crore, covering 23 Districts and metro dairies have been implemented and ended in March 1996. As part of the Operation Flood Programme – III, a new Dairy was established at Sholinganallur.

It is located in a total area of 32.6 acres at Sholinganallur village on the old Mahabalipuram Road. The total cost of the dairy is Rs.24.80 crore. The capacity of the dairy is 4.00 lakh litres per day expandable to 8.00 lakh litres per day. The dairy is equipped with centralised operation centres through micro processor controlled computer system whereby all the operations right from receipt of milk, processing, packing and despatch of milk and clean in place (CIP) of all equipments are carried out automatically.

As on date 22.74 lakh farmers are in cooperative ambit through 7,358 functional Milk Producers' Cooperative Societies in 17 District Cooperative Milk Producers' Unions. The non-Operation Flood District Co-operative Milk Producers' Unions namely Tirunelveli, Virudhunagar, Sivagangai and Kanyakumari are also functioning on the same lines with financial assistance from National Cooperative Development Corporation and Integrated Dairy Development Programme at the cost of Rs.11.71 crore and Rs.3.37 crore respectively.

To facilitate better administration and qualitative management of Integrated Dairy Development Project, the following District Co-operative Milk Producers' Unions cover the Districts mentioned against each.

The normal activities of milk procurement, marketing of milk and milk products locally is being attended to by the above District Co-operative Milk producers' Unions.

The Federation has four Dairies in Chennai, as follows:

Among the four dairies, the three dairies at Ambattur, Madavaram and Sholinganallur have obtained ISO certification 9002 for processing, packing and despatching of milk. The fourth dairy at Ayanavaram is a product dairy engaged in the production of Milk products like Khova, Ice cream, Buttermilk, Curd and Gulab Jamoon.

The Federation supervises and coordinates the activities of the District Unions and provides technical expertise, undertakes planning, erection/expansion of dairies and chilling centres of the unions on turnkey basis and also marketing their milk products both within and outside the state.

MILK PROCUREMENT AND SALE:

During the year 2000-2001, the average daily milk procurement in Tamilnadu was 17.00 lakh litres per day and the milk sales was 13.71 lakh litres per day. The sale of milk includes 6.49 lakh litres per day sold by District Cooperative Milk Producers’ Unions, and 7.22 lakh litres per day sold by Tamilnadu Cooperative Milk Producers' Federation.

PROCUREMENT PRICE FOR THE STATE:

The procurement price payable to milk producers was revised from 7.4.98 as follows:

SELLING PRICE AT METRO:

The selling price of Toned / Standardised / Full Cream milk in sachets and in AVM units are as detailed below:

Total Market Share of Aavin at chennai: 52%

NOTE ON MARKETING:

SALE OF MILK:

The Chennai Dairies have marketed an average of 7.22 lakh litres of milk per day to the consumers during the year 2000 – 2001. Milk is sold against card, cash and special order and in bulk to institutions and to individual consumers through 213 AVM Units, 195 Fibre Re-inforced Plastic Tanks and in sachets through 509 booths, 124 institutions and 34 parlours. 34 Consumers’ Cooperative Societies are functioning in and around Chennai supplying milk to consumers.

Further, sale of milk has also been introduced through private Milk Distributors in Chennai. At present 35 Nos. of private milk distributors have been appointed and 1,00,000 litres of milk per day is being despatched to the private milk distributors.

AUTOMATIC VENDING MACHINE MODIFICAITONS:

At present Standardised milk alone is being sold to the consumers through AVM units. Some of the AVMs have been identified for product sales along with the loose milk by altering the cash counter by providing shutters.

SALE OF MILK PRODUCTS:

The marketing unit of Federation is divided into three wings as follows.

Metro Fluid milk marketing.

Metro milk product marketing.

Up country marketing.

The Tamilnadu Cooperative Milk Producers' Federation Limited is an apex body of 17 District Unions. In accordance with the G.O.Ms.No.555, Agri (MP.I), dt.21.3.80, the Federation shall be responsible for the distribution of milk in the city and for marketing of all products of the various Federating Unions. Of the 17 District Unions, Salem, Erode, Madurai and Dharmapuri unions have Feeder Balancing Dairies. Surplus milk in other District Unions are diverted to the nearest Feeder Balancing Dairies and converted into products. The Feeder balancing dairies (FBDs) are producing milk products like butter, Skimmed milk powder (SMP) and ghee from the surplus milk after meeting the liquid milk demand.

Apart from these products, Cheese is being manufactured at The Nilgiris Union. Milk, Flavoured Milk and Mavin mango drink in Tetrapack is produced at Salem union. Fun products like Ice cream, Yoghurt, khova are manufactured at Ayanavaram Dairy, Chennai which is under the control of the Federation. The products are marketed by the Federation under the brand name "Aavin". Fun products are sold under the brand name "Aavin Goodness". Aavin branded products are agmarked as far as ghee and butter are concerned and ISI certified for Skimmed Milk Powder and Cheese.

NEW PRODUCTS:

The following new products were introduced in Chennai metro:

Mysorepa
Gulab Jamoon
Kalakanth
Dairy Whitener
Double Toned Milk in Tetra pack

Aavin products are marketed in Tamilnadu and other places by the Federation through the following channels.

1) CHENNAI METRO:

Marketing of the products in Chennai metro and suburbs are directly carried out by the Federation through its products wing located at Nandanam. The products are stored at the godowns at Ambattur and Ayanavaram and distributed to the outlets.

Distribution network includes parlours, Franchise retail outlets (FROs), Wholesale dealers and Milk Consumer Cooperative Societies. Federation also caters to the needs of the consumers at special functions like marriage by booking Special Orders.

A) PARLOURS:

The Federation has 34 parlours of which 7 parlours are maintained by women candidates sponsored by Tamilnadu Corporation for Development of Women, 1 parlour by Ex-servicemen and 26 parlours by Federation staff.

B) FRANCHISE RETAIL OUTLETS (FROs):

The Federation has 125 Nos. of FROs in the city and suburbs as on date. The supply is made on cash and carry basis. Commission is being paid to Franchise Retailer Outlets @ 25% on ice cream and 6% on other products.

WHOLESALE DEALERS:

The Federation has 8 Wholesale dealers in metro, which constitutes 60% of the total turnover of Chennai metro. The wholesale dealers are catering to the city through the retail outlets, which is about 2000. The Wholesale dealers are appointed on territorial basis to cover the entire city. Supply of products to them is against Demand Draft. Wholesalers are getting 4% margin and the retailers are allowed 6% margin.

The sale of products in Chennai metro and upcountry sales through 11 clearing and forwarding agents, through 12 branches at Delhi, Jodhpur, Ahmedabad, Indore, Mumbai, Kolkatta, Hydrabad, Bangalore, Calicut, Cochin, Trivandrum and Pondicherry are effected. Three Assistant Managers (Marketing) / Branch Managers stationed at Delhi, Kolkatta, Mumbai are looking after the sales of upcountry market at Northern region. The bulk sales during the period from 1999-2000 to 2001-2002 (upto June' 2001) through clearing and forwarding agents and through branches are given below:

INPUT PROGRAMMES - MILK PRODUCTION ENHANCEMENT PROGRAMMES:

During the year 2001- 2002 (upto July 2001), the District Cooperative Milk Producers' Unions procured on an average of 18.00 lakh litres of milk per day. 39 Milk Producers' Cooperative Societies (MPCS) were organised during the year 2001-2002 (upto July '2001) and in all 7,426 Dairy Co-operative Societies are functioning in 17 District Co-operative Milk Producers' Unions and out of which 1,173 Milk Producers' Co-operative Societies are Women Dairy Cooperative Societies. 14.20 lakh cows and buffaloes are under the cooperative fold and they are provided breeding cover through artificial insemination using frozen semen. Members are supplied cattle feed and fodder. Health cover through mobile veterinary units and vaccination against foot & mouth and theileriasis diseases is also provided.

The village level workers have been trained in Artificial Insemination technology. During the year 2001-2002 (upto July' 2001), 4.08 lakh milch cattle were inseminated with frozen semen. District Cooperative Milk Producers' Unions are operating mobile veterinary units with qualified veterinary doctors. They have treated 2.85 lakh cases in 2001-2002 (upto July '2001). To attend to distress calls from the members, emergency veterinary units are also operated. During the year 2001-2002 (upto July'2001), 99 regular veterinary units and 33 emergency units were functioning under the control of District Cooperative Milk Producers' Unions to attend to the health care requirements of animals under the cooperative fold.

IMPROVING LOCAL CATTLE:

As a result of artificial insemination, 37,858 female calves of superior germ plasm were born during the year 2001-2002 (upto July' 2001). Frozen semen straws of 3.57 lakhs of White Cattle & 0.83 lakhs of Black Cattle were produced at the Nucleus Jersey & Stud Farm (NJF) at Udhagamandalam and in the Buffalo Frozen Semen Station (BFSS) at Erode respectively during the year 2001-2002 (upto July'2001).

CATTLE FEED PLANT:

There are three cattle feed plants under the cooperative fold run by the District Cooperative Milk Producers' Unions. Kancheepuram and Tiruvallur Union has a cattle feed plant at Madhavaram, Erode Union has a cattle feed plant at Erode and Madurai union has a cattle feed plant at Kappalur. The production capacity of each of these plants is 100 MT/day. The balanced cattle feed produced as pellets and mash are supplied to the members of the milk cooperatives, livestock farms of the Animal Husbandry Department and to various local bodies including the Corporation of Chennai. All the three Cattle Feed Plants are running in loss due to less capacity utilisation and high cost of production.

SERVICES RENDERED BY ANIMAL HUSBANDRY DEPARTMENT

The Animal Husbandry Department provides animal health care and artificial insemination facilities to the Dairy Cooperatives in the Districts where the above services are not rendered by the District Cooperative Milk Producers' Unions.

MILCH ANIMAL SUBSIDY SCHEME

During the year 1999-2000 milch animal subsidy schemes have been implemented as detailed below.

*: Adi Dravidar Welfare

**: Adi Dravidar converted to Christianity

CALF REARING SCHEME:

During the year 1998-1999, 1,212 calves have been included under this scheme with a total outlay of Rs.129.44 lakhs. The Heifer calves in the age group of 4 to 10 months owned by the Adi Dravidar / Adi Dravidar converted to Christianity members of the Dairy Co-operative Societies, who are the beneficiaries of the milch animal Subsidy Scheme of Tamilnadu Adi Dravidar Development Corporation/Adi Dravidar Welfare Department are provided calf feed, insurance, Health cover up to the age of 32 months at free of cost.

BACKWARD CLASS WELFARE AND MINORITIES SCHEME:

Under Tamil Nadu Backward Classes Economic Development Corporation and Tamil Nadu Minorities Economic Development Corporation milch animal loan scheme loans have been provided for purchase of milch animals to the members belonging to Backward Class, Most Backward Class and Minorities of the Dairy Co-operative Societies at low interest rates repayable in a period of three years through District Co-operative Milk Producers' Unions during the year 1999-2000 as detailed below.

* - Tamilnadu Backward Classes Economic Development Corporation

** - Tamilnadu Minorities Economic Development Corporation

SUBSIDY GRANT BY THE GOVERNMENT

The Government revised the procurement and selling price of milk with effect from 7.4.98 & 16.4.98 respectively that led to a loss of 50 paise per litre of milk sold by the Federation. To compensate the financial losses, the Government agreed to grant subsidy at the rate of 50 paise per litre to Federation.

Accordingly, the Government have released subsidy as follows:

Subsequently, the Government reviewed the milk payment dues to the farmers on 26.5.2000 and released Rs.30 crore as subsidy.

Further, the Government considering the burden of the outstanding milk bill dues to Milk producers, sanctioned Rs.8.00 crore and Rs.20.00 crore as ways and means advance with interest at the rate of 17% per annum repayable in one year vide G.O.Ms.No.62 and 73, A.H & F (MP.I) Department, dated 31.3.2001 and 19.4.2001 respectively. The above amount was disbursed to the District Unions.

It has been proposed to treat the ways and means advance as subsidy and to waive the interest accrued.

FINANCIAL POSITION:

The total accumulated loss of Federation as on 31.3.2001 is Rs.86.88 Crore and for the District Unions is Rs.157.56 Crore totalling to Rs.244.44 Crore.

The main reasons for the losses are

Non-revision of selling price of milk.

Increase in raw material cost.

Excess staff.

VISION 2010:

National Dairy Development Board (NDDB) has selected six District Co-operative Milk Producers' Unions namely Coimbatore, Salem, Madurai, Trichy, Vellore and Dharmapuri for providing financial assistance to the extent of Rs.72.00 crore and Federation to the tune of Rs.46.00 crore under Perspective Plan – 2005 being the first phase of Vision 2010.

REHABILITATION OF UNIONS:

9th FIVE YEAR PLAN – CENTRAL SECTOR PLAN SCHEME - ASSISTANCE TO COOPERATIVES:

The Government of India formulated a scheme to rehabilitate District Co-operative Milk Producers' Unions, which envisages 50% grant from the Government of India and 50% matching grant from the State Government to the maximum level of accumulated cash loss of the District Cooperative Milk Producers' Unions on acceptance of certain conditionalities laid down on this issue.

National Dairy Development Board after their preliminary assessment have selected two District Co-operative milk Producers' Unions namely Erode and Villupuram under the scheme to provide Rs. 13 crore as rehabilitation assistance during 9th Five Year Plan. Accordingly, the Government of Tamilnadu towards its matching grant have made a provision for Rs.0.89 crore in the Revised Estimate 2000-2001 and Rs.5.61 crore in the Revised Budget for 2001-2002 for the above two milk Unions.

DEPARTMENT OF AUDIT FOR MILK COOPERATIVES

The Department of Audit for Milk Cooperatives has been started with effect from 1.10.1987 on the abolition of the Audit Board for Milk Cooperatives as per the suggestion of the National Dairy Development Board. This Department is entrusted with the statutory audit of all types of Milk Producers/Consumers/Supply Cooperative Societies numbering about 10,041 primaries and 17 District Cooperative Milk Producers' Unions and one Apex Cooperative Milk Producers' Federation. 370 staff are working under lent service basis from other departments like Cooperative Department etc.,

AUDIT PROGRESS:

AUDIT OF PRIMARY MILK COOPERATIVE SOCIETIES:

AUDIT FOR THE YEAR 2000-2001:

Out of 10,041 societies programmed for audit, audit in respect of 3,340 societies has been completed as on 31.7.2001. Audit in respect of 6,701 societies is in progress.

AUDIT OF DISTRICT COOPERATIVE MILK PRODUCERS' UNION:

AUDIT FOR THE YEAR 1995-96:

Audit certificate issued for all 17 Unions.

AUDIT FOR THE YEAR 1996-97:

Out of 17 District Cooperative Milk Producers' Unions audit has been completed in 16 Unions. Audit in respect of Tirunelveli District Cooperative Milk Producers' Union is in progress.

AUDIT FOR THE YEAR 1997-98:

Out of 17 District Unions, audit has been completed in 14 Unions. Audit of the remaining three Unions i.e., Kancheepuram-Tiruvallur, Villupuram and Tirunelveli is in progress.

AUDIT FOR THE YEAR 1998-99:

Out of 17 Unions, audit has been completed in 13 Unions. Out of the remaining 4 Unions, audit of Tirunelveli and Kancheepuram-Tiruvallur Unions has not yet been commenced, audit of Vellore and Villupuram Unions is in progress.

AUDIT FOR THE YEAR 1999-2000:

Out of 17 District Unions, audit has been completed in 7 Unions. In 7 Unions audit has been commenced and is in progress. Audit has not yet been commenced in 3 Unions due to audit of previous years has been taken place.

C) AUDIT OF TAMILNADU COOPERATIVE MILK PRODUCERS' FEDERATION UPTO 1993-94

Audited by Chartered Accountant and Audit certificates issued by the Director of Audit for Milk Cooperatives upto 1993-94.

1994-95:

Audited by Chartered Accountant. Test audit completed by Department. Audit Certificate will be issued after the completion of 5 conditions mentioned in the previous year audit.

1995-96 & 1996-97

Audited by Chartered Accountant. To enable the Director of Audit to complete the test audit, orders have been issued by Government sanctioning temporary post of 1 Assistant Director and 4 Senior Cooperative Auditors. Audit will be done by them and certificate issued early.

1997-98:

Audited by Departmental auditors. Audit certificate will be issued after the completion of issue of previous audit certificates.

1998-99

Audit commenced by Departmental auditors and is in progress.

1999-2000 & 2000-2001:

The proposal for sanction of one Assistant Director and 10 Senior Cooperative Auditors for Federation audit is under consideration of the Government.

GOVERNMENT REVENUE:

For the audit year 2000-2001, under Audit Fees and F.R.Cost, Rs.22.75 lakhs was collected and remitted into Government account for Rs.30.49 lakhs demand upto the month of July, 2001.

C.SHANMUGAVELU
MINISTER FOR MILK AND DAIRY DEVELOPMENT