National Cooperative Dairy

Federation of India Limited

Presented at the 46th Annual General Body Meeting of NCDFI

Honourable members,

It gives me great pleasure to welcome you all to the forty sixth annual general meeting of NCDFI. May I now present before you the Annual Report and the Audited Statement of Accounts of your federation for the year 2015-16.

Report on Operations:

During the year 2015-16, the NCDFI continued to coordinate supplies of milk and milk products. The highlights include:

Coordination with Ministry of Defence

I am happy to inform that the Ministry of Defence (MoD) policy to procure milk and milk products through NCDFI is renewed for a further period of three years and will be valid upto September 2018. While extending the policy, UHT Milk, Cheese Tinned and Canned Condensed Milk (Sweetened), which were earlier under tender systems, are brought under the negotiated contracts. Now as per new guidelines, only NCDFI member cooperatives can participate in these product supplies. I sincerely thank the MoD for their faith on NCDFI and its member dairy cooperatives. Supplies to the Army should be considered as our joint responsibility and hence, I urge for larger participation of dairy cooperatives in Army supplies. Details of supplies concluded during the financial year are given below:

Fresh Milk: During the year, NCDFI concluded contracts for supply of about 11.9 crore litres of liquid milk valued at about Rs. 475 crore from the cooperative dairies to 252 Defence units which include ASC Depots and Air Force Stations under the Ministry of Defence (MoD). These supplies are being met from more than 100 cooperative dairies situated across India on daily basis based on the requirement of the units.

Butter Fresh: NCDFI concluded contracts for supply of about 481 MT Butter Fresh valued at about Rs. 16 crore by more than 100 cooperative dairies to 227 Defence units which include ASC Depots, Air Force Stations and Naval Stations under the MoD.

UHT Milk: NCDFI concluded contracts for supply of 3.88 crore litres of UHT (Tetrapak) Milk to 87 Defence units in Northern, Eastern, Western, Southern, Central and South Western Commands valued at about Rs. 210 crores. GCMMF, KMF, RCDF, Milkfed Punjab, Mahananda and Warana Milk Union have participated in these supplies.

Milk Products: During the year, supply of about 2,618 MT of milk products valued at about Rs. 84 crores were concluded by the NCDFI with the MoD. The concluded products include 1,400 MT Whole Milk Powder, 450 MT Butter Tinned, 280 MT Ghee and 1,133 MT Canned Condensed Milk (Sweetened) and 25 MT Cheese Tinned. These supplies were allocated to Kaira, Sabar, Mehsana, Ludhiana, Warana and Indore Milk Unions.

NCDFI also concluded contracts for supply of 485 MT of milk products valued at about Rs. 10 crores to Indo-Tibetan Border Police which includes Sweetened Condensed Milk, Whole Milk Powder and Butter Tinned.

During the year, Border Security Forces (BSF) expressed their interest to procure milk and milk products for Central Police Canteens (CPC) in a system of negotiated contracts on the lines of MoD.

Supplies to IRCTC

In July 2009 Indian Railway Catering and Tourism Corporation (IRCTC) entered into an agreement with the NCDFI to procure milk and milk products of NCDFI member organizations. The agreement is extended periodically and valid till December 2016. During the year 2015-16, many member organizations have supplied milk and milk products to IRCTC base kitchens and pantry cars in Rajdhani/ Shatabdi Express trains under this arrangement.

Launch of NCDFI eMarket

During the deliberations held at a national seminar of Dairy Cooperatives on November 17-18, 2014 at National Dairy Development Board, the participants suggested that the NCDFI should consider working as a National Platform for marketing of dairy commodities to ensure transparent, fair and economic dealings for all member cooperatives. It would be also a good platform to discover the best price at a given time for both buyer and seller.

Accordingly, NCDFI launched NCDFI eMarket on June 10, 2015. This e-portal is developed with the technical support of NCDEX e Markets Ltd (NeML).

During the year, NCDFI arranged buyer / seller meets at Delhi, Mumbai, Bangalore and Coimbatore to have their valuable inputs. In the first phase, SMP, Butter and Ghee are introduced at the NCDFI eMarket. During the year, 22 auctions were conducted wherein 3,667 MT SMP and 4,701 MT Butter was sold. The brands participated in the NCDFI eMarket auctions are Aavin, Amul, Gokul, Maahi, Mother Dairy, Nandini, Sagar, Saras, Sudha, Verka, Vikas and Warana. Though both private and cooperatives are registered as members on the portal, presently only cooperatives are allowed to sell their products on the portal. Total registered members for dairy products as on March 31, 2016 was 124.

I sincerely appreciate the decision of Bihar State Dairy Federation (Sudha) and Jalgaon Milk Union (Vikas) to route all their bulk sales through the NCDFI eMarket. This decision resulted in higher realization of sale proceedings as the system concludes the prices considering the supply and demand. I have visited various dairy cooperatives, accompanied by senior officials of the NCDFI, and requested them for active participation in NCDFI eMarket. I urge all members to consider exclusive bulk sales through the NCDFI eMarket.

Considering the large requirement of agri commodities of Dairies for their cattle feed plants, second phase of NCDFI eMarket was launched on December 30, 2015 wherein Maize and DORB are introduced through Reverse Auction Mechanism. During the year, Uttarakhand Cooperative Dairy Federation, Indian Immunologicals Ltd and Sabarmati Ashram Gaushala have procured Maize and DORB through NCDFI eMarket. Many cattle feed plants have initiated the process to procure raw material through the NCDFI eMarket. Considering the advantages of NCDFI eMarket, I request all the members having cattle feed plants to utilize the services of eMarket for transparent dealings.

Total transacted value of the dairy and agri commodities at the NCDFI eMarket during the year was Rs.163 crores. I request the members to actively utilize the services of NCDFI eMarket for transparent, fair and economic dealings.

Marketing of Frosen Semen Doses

With a view to make available good quality semen doses to the milk producers in the country, NCDFI has been functioning as ‘carrying and forwarding agency’ of Frozen Semen Doses (FSDs) produced by Sabarmati Ashram Gaushala, Bidaj, Animal Breeding Centre, Salon and Alamadhi Semen Station, Chennai. These farms are either owned or managed by NDDB Dairy Services.

All these farms are having most modern Semen Production Stations in the country with most sophisticated semen processing equipment to produce frozen semen adhering to stringent quality control tests. The semen straws produced by these farms are being marketed under the common brand name ‘SAG’ which stands for Superior Animal Genetics.

During the year, NCDFI organized seven Artificial Inseminator Meets at Chomu (Rajasthan); Baroda, Godhra, Bodeli and Santrampur (Gujarat); Coimbatore and Polachi (Tamilnadu). Further, NCDFI organized a stall at Agricultural Exhibition, Ludhiana for promoting the sale of SAG produce.

During the year 2015-16, combined sale from these semen stations was 2.53 crore FSDs amounting to Rs. 48 crores which is 16.8% higher as compared to the previous year. Further, during the year 18,000 FSDs were exported to Vietnam.

Total Business Transacted

I am happy to inform that during the year 2015-16 total business transacted by the NCDFI was about Rs. 1,006 crores which includes milk and milk product supplies worth of about Rs. 795 crores to Ministry of Defence, Rs. 163 crores worth of dairy/agri commodities through NCDFI eMarket and semen doses worth of Rs. 48 crores

Accessing the Need of Dairy Cooperatives

The NCDFI Board felt that the NCDFI being an apex body of dairy/oil seeds' cooperatives should assess the need of different District Dairy/Oil Unions and State Federations and work to strengthen the Cooperative Governance and address the pertinent issues.

To get the feedback from the member cooperatives and strengthen the Cooperative Governance, NCDFI is arranging Seminars in different regions and Management Development Programs (MDPs) at Institute of Rural Management, Anand (IRMA).

During the year, three seminars for Chairmen and Secretaries of dairy cooperatives were arranged at Goa, Aurangabad and Jalgaon which were attended by about 900 participants. These programs were inaugurated by Shri Mahadev Naik, Hon’ble Minister of Cooperation, Government of Goa; Shri Haribhau Bagde, Hon’ble Speakar, Maharashtra Legislative Assembly; and Shri Eknath Khadse, Hon’ble Dairy Minister, Government of Maharashtra respectively. Topics on Clean Milk Production, Ration Balancing and Cooperative Governance were covered by experts from the field. Apart from the NCDFI Board members, Chairmen of respective Unions were dignitaries to these programs.

NCDFI sponsored two MDPs at IRMA during the year for senior and middle management of dairy cooperatives. Total 50 officers of dairy cooperatives spread across the country have attended these MDPs.

These initiatives provide an opportunity to the NCDFI to get valuable feedback from various cooperative dairies on the issues pertaining to procurement, processing, marketing, governance, policy, etc. NCDFI is working on the feedback received from the participants and also continue to arrange similar seminars in other states and MDPs at IRMA. I request the members to share their concerns and suggestions with us so as to improve the format of these programs.

Liaisoning for Cooperative

The NCDFI continued to do liaisoning with the Government on various policy issues. During the year, on many occasions, I met Shri Radha Mohan Singh, Honorable Agricultural Minister and submitted various policy issues pertaining to the dairy cooperatives. I am happy to inform that the Honorable Minister has taken positive actions on many of the issues submitted by the NCDFI.

During the meeting held with Shri Manohar Parrikar, Honorable Defence Minister, I had submitted a request for extending the policy to procure milk and milk products for further period and also consider to strengthen the policy. I am happy to inform that as a result, the policy was extended for a further period of three years and UHT Milk, Cheese Tinned and Canned Condensed Milk (Sweetened) brought under negotiated contracts.

To take up the issues pertaining to the allotment and operation of milk stalls at various railway stations and also to request for framing a policy to supply only cooperative brand milk and milk products to railway passengers, I met Shri Suresh Prabhu, Hon'ble Railway Minister. I am happy to inform that the Railway Board is actively considering issuing a policy to procure dairy products exclusively from the cooperatives.

I am happy to inform that the case filed against the Commissioner, Sales Tax Department, J&K State was pronounced in favour of the NCDFI. Sales Tax Department insisted that the cooperatives which are supplying UHT milk to Army should first transfer the stocks to their J&K depot and subsequently raise invoices so as to get the sales tax revenue. In some of the states, UHT milk is exempted while it is taxed at 5% in J&K State. Further, routing the transactions through the depot will involve certain administrative expenses. On behalf of its members, NCDFI filed a case at Jammu High Court which was pronounced in favour of NCDFI that resulted in huge savings to the supplying cooperatives / Army.

Continuous efforts are needed in taking up various pertinent issues of cooperative sector with the ministries like defence, agriculture, cooperation and railways. I request for whole hearted participation of members in working out a continuous strategy for liaisoning with various Government authorities.

Acknowledgement

I would like to specially thank the millions of our milk producers and oilseeds growers who are the grassroot members of cooperatives affiliated to NCDFI. They continue to provide the support to the NCDFI’s activities.

I gratefully acknowledge the continuing support we receive from the National Dairy Development Board. I am grateful to the Institute of Rural Management, NDDB Dairy Services, Sabarmati Ashram Gaushala, Animal Breeding Centre and Alamadhi Semen Station for their help and cooperation.

I would like to thank the Government of India, especially the Ministry of Agriculture, the Ministry of Defence, the Ministry of Home Affairs, the Ministry of Railways, the Railway Board and the Indian Railway Catering and Tourism Corporation (IRCTC) for their help and support.

I would like to specially thank NCDEX eMarkets Ltd (NeML) and all members of the NCDFI eMarket for their continued support and guidance in making the venture successful.

I would like to convey special thanks to Chairmen and Chief Executives of our member federations who have actively participated in the different meetings of NCDFI. They have always provided their valuable support to NCDFI.

My thanks to our Bankers and Auditors for the services rendered by them.

A note of appreciation for the officers and staff of NCDFI, it is through their hard work and devotion, that, NCDFI could carry out its activities smoothly during the year.

Thank you,



                                                                                                              On behalf of the Board of Directors
                                                                                                                                   Sd/-
                                                                                                                (Subhash Chandra Mandge)
                                                                                                                               Chairman